USD index weakens after reaching its four-month high

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

US Dollar              1.2500-1.2600

Euro                       1.4700-1.4800

Sterling                 1.7350-1.7450

The US Dollar Index is marginally weaker this morning in a quiet overnight session but that is after it hit a four-month high on Friday after the release of the stronger than expected employment report. Investors are looking at the strong report as a sign that the Federal Reserve will be able to reduce the stimulus program later this year and possibly start increasing interest rates at some point next year.

The Delta variant continues to spread quickly among the unvaccinated and it was in the news that the UK is considering imposing a travel ban on visitors from the US and the virus is once again hitting 100K new cases a day in the US.

The Canadian Dollar weakened off on Friday after the poor jobs report but it has been able to recover a little overnight as it opens the day at the 1.2530 (0.7981) level. The price of a barrel of oil has dropped nearly 4% overnight to trade at $65.70 this morning as investors see a drop in demand for oil brought on by the growing virus spread around the globe. If this continues look for the commodity currencies to continue to trade weaker.

Nothing of importance on the calendar until Wednesday's US inflation report, ahead of that look for USD.CAD to trade near the top of the range if the oil price continues to weaken.