US Dollar Weakens as Inflation Moderates, Canadian Dollar Struggles Amid Slowing Growth

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

US Dollar        1.3400-1.3500

Euro                 1.5000-1.5100

Sterling            1.8100-1.8200

WTI Oil (opening level) $67.40

The US Dollar index is marginally weaker and near one-year lows as the month of September comes to an end. The Dollar was lower after Friday's secondary inflation data showed inflation continues to moderate in the US and should allow the US Federal Reserve to reduce interest rates with another 0.50% cut in November. Overnight the Euro was marginally stronger as the EU economy reported some better than expected economic data so the Dollar starts the day on the backfoot once again.

The Canadian Dollar has had a tough finish to the month as our GDP report for July showed that they economy only grew 0.2% in the month of August with the annualized rate coming in at 1.0% which is well below the Bank of Canada's forecast growth rate of 2.4%. This level of activity should clear the way for a 0.50% interest rate cut from the Bank on October 23rd and will keep the Canadian Dollar on the back foot. USD.CAD rose to trade at 1.3510 (0.7402) overnight and should move higher in the short-term.

Stocks in Asia rose once again overnight on the back of the Chinese Government stimulus plan announced last week but it did not translate into gains overnight and stocks in North America are pointing lower to start the week. It is a big week on the calendar with the US employment report on Friday and today we get a speech on the economy from Fed Chair Powell, markets will be looking for any signs of what the Fed will do in November.