CAD index starts new month on a positive note

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

US Dollar         1.2000-1.2100

Euro                 1.4675-1.4775

Sterling            1.7000-1.7100

The US Dollar Index is weaker this morning as the month of June kicks off, In Europe, the Euro got a boost from an inflation report that shows inflation is growing throughout the region and Germany announced they were lifting lockdown restrictions as that region economic recovery seems to be moving forward and vaccinations have brought a lot of the virus spread under control. Sterling also got a big boost higher as officials from the Bank of England talked about interest rate hikes next year, it could not hold onto those gains during the early morning session but it is become clear now that most Western countries will be increasing interest rates next year as their stimulus programs are eliminated.

The Canadian Dollar was able to extend some gains yesterday as USD.CAD opens the new month lower at 1.2030 (0.8313) it best level in a few sessions. The Loonie has also picked up some gains against other currencies so overall the Canadian Dollar starts the new month on an upswing. No doubt the Loonie was helped by the jump in oil price yesterday as the price of a WTI barrel of oil jumped to $68.40 which is almost a 50% jump in the price of oil from this time last year and up over 2% from yesterday. OPEC has scheduled a meeting this week to discuss increases in output so you should see enhanced volatility in the oil price which will continue to affect the Loonie.

The Loonie will also be front and centre today as we get the release of the March and 1st Quarter GDP report from Stats Canada. The market is expecting a 1st Q annualized growth rate of 6.7% which when you consider everything that is going on is a good result and the Loonie should benefit from a strong number.