Government debt might surpass $1 Trillion for the first time in Canadian history

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

US Dollar         1.2500-1.2600

Euro                 1.5050-1.5150

Sterling            1.7450-1.7550

The US Dollar Index is again marginally weaker this morning as the Greenback continues to give ground after pushing higher earlier in the year when US interest rates were on the rise. Both the Euro and Pound have moved considerably higher over the past few weeks as those regions while lagging behind the progress in the US seem to be getting better control over their vaccination programs.

The Canadian Dollar lost ground overnight to pretty much every currency but that was after a small rally when the budget was released. The first budget in two years is predicting a deficit of $155 Billion (down from $350 Billion last year) this year and the overall Government debt will surpass $1 Trillion for the first time in our history. The Government will argue that as long as the debt to GDP ration stays relatively positive then we can afford these deficits to get past the pandemic but I can easily imagine what future generations that are going to be paying off these debts will think.

Nothing of note on the calendar for today, USD.CAD should remain close to the 1.2500 (0.8000) level while the Canadian markets awaits the inflation numbers tomorrow.