CAD Stuck as Markets Await U.S. Election Outcome—Rate Cuts Loom on Both Sides

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

US Dollar        1.3840-1.4010

Euro                 1.5070-1.5270

Sterling            1.7930-1.8140

WTI Oil (opening level) $71.60

The CAD is opening at 1.3902 ( 0.7193)

As the market braces for the election results in the USA , everyone is wondering ' what will happen with the markets?'

It's a good question, because whenever there is a doubt there is fear. And fear drives people crazy.

The jobs number came out on Friday and it was none event, because the election is distracting everyone. But on its own the numbers should have meant a weaker USD because it showed that interest rates in the USA will likely be cut at the next meeting on Thursday at 2 pm- to help with the US economy grow! The market movement has been muted for the last week or so, as we continue to trade in a narrow range.

Last week we saw the CAD stuck in a trading range of 1.3885 to 1.3945. It will likely stay in this range until after the election in the USA is settled. Then we could see the range come back to the traditional range of 1.36-37 or travel north of 1.40 to 1.43. Both are possible given the way the vote goes.

As I wrote on Friday. There are not a lot of redeeming qualities that would go to strengthen the CAD. The economy is showing no real growth- only 1.7% growth- according to the statistics released. The Canadian government has taken away most reasons to invest in the country with their taxes, regulations, and tone. Ergo why all the talk about another -stimulus- interest rate cut in December for Canada, they have nothing left in their toolbox. 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.