USD index falls as stocks show significant increase

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

US Dollar         1.2600-1.2700

Euro                 1.5200-1.5300

Sterling            1.7600-1.7700

The US Dollar Index is marginally weaker this morning in what was a quiet overnight session. Investor sentiment continues to grow as US stocks jumped significantly yesterday after a couple of days of losses and US interest rates continue to retreat to lower levels. This tendency should continue into today as stocks are set to jump on the North American opening.

The Canadian Dollar is marginally stronger as USD.CAD approaches the lower levels of the recent 1.2600-1.2700 trading range. Yesterday also saw the Loonie pick up some strength as the Canadian GDP report was well received by the markets, the Canadian economy fell 5.4% in 2020 but the numbers for the fourth quarter were a bit better than expected which when you consider what a year 2020 was the numbers are better than most economists thought. The report went on to say that growth in January should be around 0.5% and that the economy should be ready for a rebound in 2021 as Canadian consumers have grown their savings and seem ready to spend in great numbers. I would imagine there is a pent-up demand for travel so lets hope that industry segment can stage a recovery in 2021.

Nothing of substance on the calendar for today, I look for USD.CAD trading to remain range bound but the Loonie should still get a little stronger with a possible test of the 1.2600 (0.7937) level at some point today.