Canadian Dollar suffers from the uncertainty in the oil market

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

US Dollar             1.2650-1.2750

Euro                     1.4250-1.4350

Sterling                1.6950-1.7050

The US Dollar index is marginally higher this morning as the market reacted to the Biden administration announcement that current Fed Chair Jerome Powell would be appointed for another term as head of the US Central Bank. Investors like consistency and they now know that the Fed will keep on their plan to cut back their stimulus program and increase interest rates next year.

COVID continues to play havoc with European countries especially in Germany where cases are now the highest they have ever been and now the US has announced that cases are on the rise once again especially in younger children. Stock markets were all lower yesterday on this news and as they will remain under pressure as long as virus continues to take hold.

In another piece of key overnight news the Biden administration announced that they would (possibly as soon as today) release 35 million barrels of oil from their strategic reserve in an attempt to bring down the price of oil, this move is expected to be in concert with other countries such as India, Japan and South Korea. Initially the price of oil fell below $76 on the news but it is back above that level as I write. In response to this announcement a spokesperson from OPEC said that if this happens they would meet to discuss fighting this initiative by stopping the planned increase in production that they had previously agreed.

The Canadian Dollar is weaker this morning against the US Dollar as USD.CAD opens the day above the 1.2700 (0.7874) level, the currency pairs highest level in almost two months. With the activity in the oil market, it is no surprise that the Loonie has suffered a little but at the very least it continues to hold its own against the other currencies.

Nothing of note on the calendar today, stocks are looking flat on the opening unless they have a big drop the US Dollar should remain stable. Markets will keep an eye on the virus news coming out of Europe and the US and react to any further lockdowns that will slow economic growth.