USD loses some of its yesterday's gains

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

US Dollar             1.2725-1.2825

Euro                     1.4950-1.5050

Sterling                1.7400-1.7500

The US Dollar Index is marginally lower this morning as equity markets stabilized overnight as global investors picked up cheap stocks after yesterday's rout. The Dollar was able to pull back some losses as stocks moved higher overnight but the market is still watching to see what happens with Evergrande a massive Chinese development company, if it does declare bankruptcy in the coming days there is some market fear that the damage could spread to other sectors in the region and create havoc. For the moment investors seem to be taking a wait and see attitude.

The Canadian Dollar has been able to pull back some of its losses from Monday with USD.CAD opening the day at the 1.2760 (0.7837) level, the Loonie picked up some strength on the weaker US Dollar and stronger overnight commodity prices. It may have also picked up some strength from the Liberal victory as markets tend to like results that they are familiar with and not change which can create havoc with the markets.

That being said the Canadian Dollar will still be very susceptible to volatility over the coming days if stock markets take another nosedive, US Dollar buyers should be very wary of that.

Nothing on the calendar of note for today. Stock and currency markets will continue watch out for any news on Evergrande and also the unfolding energy crisis in the UK where the government said they will not step in to protect any small energy companies that go bankrupt in the coming days due to high natural gas and electricity prices. Currency market volatility will remain higher over the coming days.