USD index rises as Europe announces further lockdowns

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

US Dollar         1.2550-1.2650

Euro                 1.4900-1.5000

Sterling            1.7300-1.7400

The US Dollar Index is marginally stronger this morning as the announcement of further lockdowns in Europe have pushed the Euro and Sterling lower, most European countries are fighting big rises in the number of virus cases as the in-fighting over vaccine distribution continues.

The Canadian Dollar was the big overnight currency loser as USD.CAD jumped back above the 1.2550 (0.7968) level overnight and almost reached the 1.2600 (0.7937) level before pulling back lower a bit earlier this morning. The Loonie also lost ground to both the Euro and Pound so once again we see the Loonie cannot go on an extended run and continues to trade in response to movement in the US Dollar.

The big market moment of the day will come this morning when both Fed Chair Jerome Powell and Treasury Secretary Janet Yellen are set to testify to Congress on the state of the US economy, of interest to Congress will be their commitment to their current stimulus plan in the face of rising inflation and long-term interest rates. My guess is that they will say the US economy is set for a major rebound and that they will let inflation and interest rates run until such time as the economy is on a strong footing. I look for stocks to react positively to this kind of statement which should cap the overnight run up in the US Dollar.