US Dollar marginally weaker as Fed meeting looms, Canadian Dollar shows strength

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3675-1.3775

Euro                1.4575-1.4675

Sterling           1.6900-1.7000

WTI Oil (opening level) $81.57

The US Dollar index is marginally weaker to start the new week as markets start to get ready for next week's Federal Reserve policy meeting. Ahead of any decision by the Fed markets remain on edge for the moment as Middle East tension seems to have calmed down but as we all know the conflict can kick off again at moments notice. With the exception of tech stocks, the Dow Jones continues to plow ahead as the economy and the Dollar both remain strong.

The Canadian Dollar has had a good start to the week as USD.CAD fell to trade at the 1.3720 (0.7288) level which is his best level in about 10 days. The Loonie also made significant gains against both the Euro and Pound so overall a great start to the week for the Loonie but once again there is no real reason to expect the Loonie would go on a sustained strong run so US Dollar buyers should continue to look at these kinds of dips as an opportunity to buy some USD.

The highlight of the week on the calendar will be the first look at Q1 GDP out of the US which will be released on Thursday. Ahead of that we have some Canadian data with Retail Sales on Wednesday and Producer Prices due out today. After a good recovery on Friday stocks had a strong overnight session and should have a positive opening this morning. For the most part the US Dollar should remain range bound and the Loonie may be able to make some small gains depending on the data.