US Dollar index jumps as the wave of disturbing Covid news covers the world

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

US Dollar         1.2850-1.2950

Euro                 1.5650-1.5750

Sterling            1.7100-1.7200

The US Dollar index is much stronger today as the UK is in crisis after most countries have isolated the United Kingdom in response to a new strain of the virus which is sweeping the country. GBP.USD has dropped over 2% this morning in response to the latest outbreak, the travel bans that were imposed over the weekend and also Brexit negotiations that have reached a stand-still only 10 days before the transition period is due to come to an end. While negotiations are still on-going it is now very unlikely that the EU members could ratify a deal before the end of the year if negotiations were successfully completed in the coming days.

In the North America stock markets are all poised for a big drop as events unfold in Europe and this is despite the encouraging news that Congress is expected to pass a $900 Billion stimulus package and a large government funding bill that will keep the Government operating for the next fiscal period. As I write, the Dow Jones is set to open almost 500 points lower as fear has taken over the markets once again, it is going to be a tough day on the markets for investors.

The Canadian Dollar has not been immune to recent developments with the run of Canadian Dollar strength coming to a quick end over the weekend. USD.CAD opens the day at 1.2890 (0.77580) as the quick run up of the US Dollar has really hurt the Loonie, the only currency that the Loonie is stronger against is the Pound which itself is very weak as I mentioned. Once again, we see the Loonie being punished by events outside of the country, the Loonie was not helped when Canada announced a 48-hour ban on flights from the UK as it assesses the latest virus news and also a big overnight drop in the oil price as a result of an expected fall in demand for oil from Europe as economic activity in the region grinds lower.

There is nothing of note on the calendar today, all investors eyes will be on the stock market just to see now bad things will get today and what happens the rest of the week. If thinks don't turn around in the UK quickly the Pound could be in a free-fall not seen in years.