GBP index has lost more than half a percent against USD over the last few weeks

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

US Dollar         1.2550-1.2650

Euro                 1.4950-1.5050

Sterling            1.7250-1.7350

The US Dollar Index is marginally higher this morning as the markets await the release of the US March Inflation report. It is expected that year-over-year inflation in the US will jump to 2.5% up from the February report of 1.7%. A strong reading should push the US Dollar higher despite calls from Federal Reserve officials that any rise in inflation will be unsustainable in the short-term and they have no plans to end their low interest rate environment any time soon.

The big currency loser over the last few weeks has been the British Pound as it has dropped by over half a percent against the US Dollar this month. The Brexit roll-out as not gone as planned, British exports to the EU dropped by 41% in January as compared to January 2020 and already business associations are calling for a change to the rules. Meanwhile in Norther Ireland pro unionist demonstrators are rioting in response to the UK government treating them differently by imposing a customs border on any goods coming from the region. We should see Sterling trade with a weak bias for some weeks to come yet.

The Canadian Dollar gave back some gains yesterday with USD.CAD opening the day at the 1.2620 (0.7924) level after touching 1.2530 (0.7980) yesterday morning, once again we see the currency pair continue to range trade and move in response to movements in the US Dollar. Yesterday's Bank of Canada business outlook survey showed that Canadian Businesses feel the worst of the pandemic is behind them and conditions should improve throughout the year, Today's announcement of $5.9 Billion in aid for Air Canada should help the travel sector and could help to improve the overall economy.