USD index moves higher as investors react to the discovery of the new Covid variant

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

US Dollar             1.2700-1.2800

Euro                     1.4350-1.4450

Sterling                1.6950-1.7050

The US Dollar index is marginally stronger this morning as markets react to comments from medical experts in South Africa that the symptoms of Omicron strain seem to be moderate to mild at the moment. Vaccine companies also indicated that they now have the tools to produce an updated vaccine booster in the new year if needed.

Both the US Dollar and European stock markets were all higher (Asian stocks were a bit lower but that was because they were playing catch-up from Friday) on this news recovering from their tough day on Friday. This morning, the Dow Jones is pointing some 225 points higher as I write so the Canadian market will also stage a bit of a recovery and pick up some losses from Friday.

The Canadian Dollar has staged a small rally against the US Dollar overnight with the currency pair opening the week at the 1.2740 (0.7849) level and the Loonie has remained constant against the other currencies, for the moment the Loonie remains supported.

Oil currently trades at $71.70 a barrel, of interest to Canadian Dollar traders will be the OPEC+ meeting scheduled for later this week that will have a discussion on their plans for increases in production. If they decide to cancel these planned increases then you may see the oil price move back higher and the Loonie benefit in the short run.

It is a busy week on the economic calendar as we get the Canadian GDP report tomorrow and then the new month kicks off with both US and Canadian Employment numbers on Friday. Volatility should remain supported with markets watching closely any developments with the virus.