CAD takes advantage of the unstable energy markets

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

US Dollar             1.2400-1.2500

Euro                     1.4350-1.4450

Sterling                1.6950-1.7050

The US Dollar Index is again stronger this morning as the energy crisis is now looking like it could slow the global recovery from the pandemic. In Europe demand for natural gas by industries has dropped by over 12% as certain business can not afford to operate and pay the increasing cost. The price of a barrel of oil reached $81.20 yesterday before falling back overnight, it is only a question of time before we see markets questioning the reduction of stimulus by central bankers in the face of this damage to the global economy.

The Canadian Dollar has been one of the few currencies that has benefitted from the current conditions. With the large increase in the oil price our balance of trade is sure to grow as the energy sector will benefit but like other countries the rest of the economy will come under stress as high energy prices are being felt across all sectors.

USD.CAD opens the day at the 1.2450 (0.8032) level and it looks like it will hold onto its strength for the day. We do get some US inflation data tomorrow, the US market will want to see how the latest round of price pressures in the energy market is affecting the overall economy, markets may stay steady ahead of that release.