Dollar Strengthens Amid Market Volatility: Eyes on US Jobs Report and BOC Decision

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

US Dollar        1.3500-1.3600

Euro                 1.4950-1.5050

Sterling            1.7750-1.7850

WTI Oil (opening level) $72.08

The US Dollar index is marginally stronger this morning as the Dollar was able to extend some gains on a big stock market drop yesterday, on the back of a weaker Euro overnight and some weaker than expected secondary US economic data from yesterday. Later this week the market will get the US Employment report which is expected to show a weakening labour market and will lead to an interest rate cut later in the month, how much of a cut will keep the markets guessing.

The Canadian Dollar is marginally weaker this morning as the Canadian market awaits word today from the Bank of Canada, USD.CAD opens the day near the 1.3550 (0.7273) level and we will see where it goes after comments from the Central Bank. It is fully expected that the BOC will cut interest rates once again by 0.25% bringing the bank rate down to 4.25%, more importantly the market will be looking at the comments from the Bank to see if another rate cut is needed.

In addition to the BOC we also get some further US secondary data and some early job information on the calendar. Stocks are poised for another big drop on the opening and may be in for another tough day which will result in some US Dollar gains.