USD index rises as markets react to the huge stocks sell-off

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

US Dollar         1.2825-1.2925

Euro                 1.5500-1.5600

Sterling            1.7500-1.7600

The US Dollar Index is considerably stronger this morning as the markets react to the huge selloff in US stocks yesterday and a very tepid US Federal Reserve that said the US recovery was moderating and that the recovery of the US economy will depend on how successful the vaccine distribution plan is. The Dollar was also buoyed by comments from British Prime Minister Johnson that the UK economy will remain in lockdown until March to combat the virus.

With the TSX following the Dow Jones yesterday into negative territory the Canadian Dollar bore the brunt of the weaker US Dollar as USD.CAD rose to trade as high as 1.2870 (0.7770) this morning before falling back a little. The Loonie salon lost significant ground to both the Euro and Pound so clearly investors are looking at the Canada economy has a riskier investment if the US economy is going to slow down. We will see where USD.CAD now settles but at the moment the Loonie looks very weak and will continue to be pushed around by the Greenback.

Today's calendar was highlight by the US GDP report for the fourth quarter which came in as expected at an annualized growth rate of 4%. Stocks are pointing a little lower on the opening but this number should help then recover some of yesterday's losses.