US Dollar Slips on Recession Worries, Loonie Gains Ground

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

US Dollar        1.3700-1.3800

Euro                 1.5000-1.5100

Sterling            1.7400-1.7500

WTI Oil (opening level) $83.57

The US Dollar index is marginally weaker tis morning and stocks area again in for a tough day as more investors weigh the possibility of the US economy entering a recession and see potential significant interest rate cuts from the Fed starting in September. JP Morgan released a statement this morning that they see the likelihood of a US recession by the end of the year increasing to 35% and increasing to 45% for next year.

The Canadian Dollar has been able to hold onto its recent strength over the last couple of days as it was able to capitalize on weakness in the US Dollar. Given that the Bank of Canada should also be announcing another rate cut next month I am not sure how much the Loonie can strengthen but for now it is outperforming its Southern neighbour.

Today the market will be looking for clues on the US economy with the weekly release of the Initial Jobless Claims report, any signs of further increases in unemployment will push both the stock market and the Dollar lower throughout the day.