Last full trading week of January starts with a weaker USD index

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

US Dollar         1.2675-1.2775

Euro                 1.5400-1.5500

Sterling            1.7350-1.7450

The US Dollar Index is marginally weaker this morning as we start the last full trading week of January. Markets will be watching the path of the Biden administration's $1.9 Trillion stimulus plan that may be running into some bi-partisan trouble as some lawmakers are questioning the size of the program. We do get the US Federal Reserve reporting on interest rates this week so I am sure they will comment on the need for the full program, it will be interesting to see how the market and Dollar react if it runs into trouble in Congress.

The Canadian Dollar opens the week just a little weaker as USD.CAD remains range bound between 1.2600 and 1.2700. USD.CAD did try and break lower once again last night but as we have seen anytime the exchange rate gets below 1.2600 (0.7937) it quickly snaps back higher so no momentum for the Loonie at the moment.

The only Canadian data of note due out this week will be the GDP report for December on Friday, the highlight of the calendar will be the US Federal Reserve on Wednesday where they are not expected to make any changes to their interest rate or stimulus programs. Ahead of these events I would expect USD.CAD to remain range bound.