USD index gets stronger again as covid continues to affect the global economy

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

US Dollar         1.3300-1.3400

Euro                 1.5600-1.5700

Sterling            1.7250-1.7350

The US Dollar index is again higher overnight as the currency market reacted to yesterday's melt down in the US stock market and the ever-increasing spread of the virus, especially in Europe. With both France and Germany returning to lockdown states there is a growing concern that the recovery will be derailed and both of the Euro and Pound are trading weaker again this morning.

This morning the European Central Bank gives an update on its interest rate policy and previously it had been thought that the Central Bank would remain static but with the latest developments with the virus a case could be argued for further interest rate cuts and more stimulus which would drive the Euro lower and the US Dollar even higher.

The Canadian Dollar opens the day weaker against the US Dollar as USD.CAD has reached a high of 1.3360 (0.7485) its highest level in almost a month. Yesterday the Bank of Canada basically said they would keep interest rates at current levels until at least 2023 when inflation should reach its 2% target level. It looks like the Loonie will remain at the mercy of the markets for some time.

We may see a slowing of the stock market decline today as the economy gets the US GDP report for the 3rd quarter and it is expected to show that the US economy rebounded 30+% in the quarter. This would be the biggest gain in history for the economy but of course it has to be tempered by the fact that it is coming off the biggest decline and the question of what will the increase in the virus bring for the fourth quarter. If we see the stock markets rebound a little today the US Dollar should trade weaker and the Loonie pick up some strength.