Global stock markets continue to fall

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

US Dollar         1.2550-1.2650

Euro                 1.5100-1.5200

Sterling            1.7500-1.7600

The US Dollar Index is marginally stronger this morning as global currencies fall in favour of the US Dollar as the virus extends its third wave around the globe. In India the country is averaging 200k new cases a day and in Japan the Government is declaring a new state of emergency to combat the virus, as a result global stock markets continue to fall and investor money is moving back into the US treasury market. It may be an extremely hard few weeks for countries where the virus is taxing the health care system so look for investors to stay away from stocks as the virus soars.

The Canadian Dollar continues its tough week and USD.CAD opens the day at the 1.2600 (0.7937) level which is the currency pairs highest level in almost 10 days. The Loonie also continues to lose ground to the other currencies with EUR.CAD and GBP.CAD all considerably higher after the last few sessions. Again, Canada's inability to control the virus is playing out on the global markets and investors are staying away from the Canadian dollar at the moment.

The Canadian Dollar is directly in the international spotlight this morning as we get both the March Inflation rate and the Monetary Policy Report from the Bank of Canada. Inflation is expected to jump above the 2.0% level to a high of 2.3% which under normal conditions would start the Bank of Canada to consider hiking interest rates to stifle inflation but with the pandemic raging they like the Federal Reserve in the US will let inflation run high in the short-term. The Bank is expected to keep interest rates where they are at the moment but it looks like they will start to scale back their stimulus program by buying less bonds which of course is the precursor to higher interest rates down the road. Whatever happens we should see enhanced volatility with the Canadian Dollar.