USD index sinks again

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

US Dollar         1.2500-1.2600

Euro                 1.5250-1.5350

Sterling            1.7700-1.7800

The US Dollar Index is marginally weaker this morning as the US markets were supported by the comments yesterday from Federal Reserve Chair Powell that the Fed will be keeping their low interest rate regime in place for some time and are willing to let inflation run higher in the short-term if needed. The Dollar lost ground again to the Pound with GBP.USD reaching a high of 1.4195 and EUR.GBP falling to its lowest levels since 2015. The UK markets are optimistic on the British economy at the moment as the Government there has announced a gradual opening of the economy on the back of their successful vaccination program.

The Canadian Dollar has been able to garner some overnight strength as USD.CAD has fallen below the 1.2600 (0.7937) level for the first time in months. The Loonie only made small gains against the Euro and Pound so this tell me that yet again the Loonie is being moved on weakness in the US Dollar and not domestic issues, it does seem at the moment that the Loonie could strengthen further in the short-term but US Dollar buyers should be wary of the quick pull back as we have seen in the recent past.

It should be a fairly stable day on the currency markets, there is nothing of note on the economic calendar and stocks are pointing a bit higher on the opening. Look for USD.CAD to establish a new short-term trading range and we will see what happens with the US Dollar as the US stimulus package is being rolled out.