Canadian dollar weakens as oil price falls below $90 a barrel

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

US Dollar             1.2850-1.2950

Euro                     1.3050-1.3150

Sterling                1.5600-1.5700

WTI Oil (opening level) $88.14

The US Dollar index is marginally stronger this morning as global investor's turn their attention to the US July employment report which is forecast to show that the US economy created 260K new jobs last month, in a worrying development to the US employment picture the amount of people claiming jobless benefits increased last week to 260,000. If the actual number of jobs created last month is a lot less than forecast then look for the volatility to increase in the currency markets and pressure to form on the US Federal Reserve to slow the pace of their interest rate hikes.

The Canadian Dollar is a bit weaker this morning as we also await employment numbers here in Canada. We are expecting 20K new jobs to have been created after a drop last month of over 40K so again a big miss in the number will weigh on the Loonie and push USD.CAD higher.

Commodity currencies in general are weaker as you can see above the price for a barrel of oil has fallen below $90 for the first time in while. Investors fears of a global recession are pushing the prices for commodities lower and hurting those particular currencies that are sensitive to commodity prices.

Stocks are pointing higher to start the day after a down day yesterday but of course everything this morning will depend on the employment reports, either way we should see enhanced volatility throughout the day.