US Dollar index gets a little stronger as markets are still watching the Republicans and Democrats negotiating on the stimulus package deal

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

US Dollar         1.3100-1.3200

Euro                 1.5500-1.5600

Sterling            1.7200-1.7300

The US Dollar index is marginally higher this morning as markets still are in wait-and -see mode with the ongoing discussions between the Democrats and Republicans on an updated Stimulus package for the US economy. Treasury Secretary Munchin and House leader Pelosi continue to talk and there was some optimism yesterday that they could reach a deal near the $2 Trillion mark but the question remains will the Republicans support such a number. They have not in the past so it will be up to Trump to convince them, he needs a deal to help his flagging political fortune.

In the EU, Brexit negotiations continue after the UK Government agreed to further talks with the aim of getting a deal done by the middle of November. Sterling jumped higher on this news overnight so there is renewed optimism that a deal can be reached by the deadline.

The Canadian Dollar had an up and down night with USD.CAD reaching a low of 1.3090 (0.7639) before pulling back to open the day at 1.3165 (0.7596). I think the Loonie did a little better yesterday on the growing optimism of a US stimulus deal but when it became evident that a deal was not going to happen overnight the Greenback jumped and the Loonie suffered.

The Canadian inflation data for September came out yesterday and it was slightly higher than expected but nothing to get too excited about. The market will get a sense of what the Bank of Canada is thinking on inflation when they have their interest rate meeting next week.

Markets will be watching the polls after tonight's debate. Realistically it is Trump's last chance to turn around his fortunes, if it looks like a Biden victory in the coming days then I think stock markets will turn positive and the US Dollar will fall back.