Market awaits Fed Minutes as US Dollar strengthens and Sterling rises on surprising UK inflation

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

US Dollar        1.3600-1.3700

Euro                1.4750-1.4850

Sterling           1.7350-1.7450

WTI Oil (opening level) $78.15

The US Dollar index is marginally stronger this morning in another quiet session as the market awaits the release of the minutes from the latest Federal Reserve meeting held last month. I don't think the market will get much new information from the minutes as most Federal Reserve speakers yesterday were all preaching caution when it comes to lowering interest rates. With the US economy still going strong it is unlikely that the Fed will cut anytime soon and will continue to watch US inflation readings before making any cut.

This morning Sterling got a boost as the UK recording a higher-than-expected inflation rate, a number which should keep the Bank of England on the sidelines throughout the summer. GBP.USD jumped 50 points on the news and GBP.CAD jumped 70 points before pulling back a little early this morning.

The Loonie continues to range trade between 1.3600 and 1.3700 but the Loonie lost some ground and traded near the top end of the range as our inflation came in lower than expected. The Core inflation rate fell to 1.7% which has increased the chance that the Bank of Canada will cut interest rates in June (June 5th meeting date) which will work to push the Loonie lower. US Dollar buyers may want to start looking about getting some US onboard ahead of that announcement.

Stocks are pointing lower on the opening as the Tech markets await the results from Nvidia which seems to be dominating the markets at the moment. Currency markets should remain quiet barring any surprises from the Fed minutes release this afternoon.