USD index rises as markets can't reach the consensus on the state of the American recovery

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

US Dollar         1.2700-1.2800

Euro                 1.5350-1.5450

Sterling            1.7550-1.7650

The US Dollar Index is higher this morning in more back and forth action for the Greenback as markets cannot seem to come to a consensus on the state of the American recovery. Yesterday saw the US Jobless claims number come in a little lower than expected and stocks in the US continue to push forward at record rates.

In the UK, the Pound is lower as GDP data showed the economy shrunk 9.9% last year which is the biggest annual drop in recorded history. Going forward it looks like tough slogging for the UK economy as just weeks after the Brexit deal came into force there are already major issues with the EU on how to resolve the trade issues that are coming about. This will be a mess for both economies for some time to come.

USD.CAD has moved higher overnight as the rate opens the morning at 1.2740 (0.7849) as the Loonie could not fight off the stronger US Dollar. The Loonie did hold in against the Euro and Pound so it was not a complete breakdown for our dollar.

It should be a quiet day on the markets, we do get some secondary Canadian inflation data which will be a precursor to the final inflation numbers later in the month. That being said we may get a little movement in the Loonie as more and more markets are becoming concerned with growing inflation resulting from all the stimulus governments are pouring into their respective economies. A strong Canadian PPI (Producer Price Index) report this morning may help the Loonie recovery a little but it won’t be anything significant so continue to keep an eye on the stock markets as they are pointing lower to start the day and will give overall direction to the currency markets.