Muted Markets as U.S. Job Growth Slows and CAD Stagnates Ahead of Key Election

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

US Dollar        1.3830-1.4020

Euro                 1.5030-1.5230

Sterling            1.7940-1.8130

WTI Oil (opening level) $71.09

The CAD is opening at 1.3927 ( 0.7181)

This morning the jobs numbers came out in the USA, and they only created 12 k new jobs. A very low number. They say that the unemployment number didn't change. This weakness will likely lead to a cut in interest rates in the USA by another 25 bps. The market movement has been muted so far and we continue to trade in a narrow range.

This week we saw the CAD stuck in a trading range of 1.3885 to 1.3941. It will likely stay in this range until after the election in the USA is settled. Then we will see it come back to the traditional range of 1.36-37 or travel north of 1.40 to 1.43. I can't tell you which contributing factor will be the difference maker because there are a few to mention beyond the election next week. Low oil prices. Stagnant economy. Another 50 bps interest rate cut suggested for December.

There are not a lot of redeeming qualities to strengthen the CAD, so it's likely the only way we see a stronger CAD is if there is a weakening of the USD. That is possible, but watch the US index and you can see that it is trading with strength currently. The range for the year have been between 100.20 to 106.6 through out the last year and is currently around 104. That indicates to me a strong $$ policy is in effect. That could change with a new administration in the white house.

One of my favorite sayings - that I have come to think about more and more- is about a changing market. "When the facts change, then I change" What do you do? This elections will change everything for the USA, so I will watch with interest knowing that we will be at a different level in a few weeks time.