The US stimulus bill and the UK Brexit deal pushed down the USD index

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

US Dollar         1.2800-1.2900

Euro                 1.5650-1.5750

Sterling            1.7250-1.7350

The US Dollar index is weaker post the Christmas holiday break as the passing of the stimulus bill and agreement on a Brexit deal have all helped to push the US Dollar lower. The stock markets all loved the stimulus news and the Dow Jones was higher yesterday in light trading conditions. These developments set up investors for a robust 2021 and strong economic recovery once the vaccination program starts to take hold.

In the UK, the Pound is higher post Brexit but not has high as a lot of investors thought it would jump. The EU member states still have to approve the deal but that is expected today or tomorrow and you may see a further jump in the Pound but for the most part a successful vote looks already priced in so going forward GBP.USD trading will focus on the health of the British economy.

USD.CAD continues to range trade and opens the first day after the holiday at the 1.2820 (0.7800) level so it was not able to stage a breakthrough on the weaker US Dollar, it did pick up some gains against the Pound but those gains were offset by some loses to the Euro. Overall a mixed start to the shortened trading week but I think given that the US Dollar should continue to trade with a weak bias I think the Loonie will test the 1.2800 (0.7813) level at some point before the New Year's Holiday.