USD index appreciates as investors move out of stock markets

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

US Dollar             1.2550-1.2650

Euro                     1.4850-1.4950

Sterling                1.7350-1.7450

The US Dollar Index is stronger this morning as investors are moving money out of stock markets and into the safe haven products like US Treasuries. The spread of the virus continues with the New Zealand Kiwi taking a big hit as that country reported its first case in months and immediately went into lockdown, in the US the virus is killing about 250 people per day and is back up to November levels when the virus was near its peak.

The Afghanistan crisis has investors worried that it has dramatically weakened the Biden administration and will cause issues with the passing of their massive infrastructure bill, the sooner this bill is passed the better it will be for the US economy.

The Canadian Dollar is at its weakest level in a few days as USD.CAD has moved back up to open the day at the 1.2610 (0.7930) level, the Loonie was hit by the stronger dollar overnight and a 3% drop in the oil price over the last few days. US records show a sharp decrease in gasoline usage due to the rapid spread of the virus, in this environment it is hard to see the Loonie extend and significant bouts of strength over the short-term, I think we will continue to see USD.CAD move higher.

We have some secondary data on tap today but for the most part look for the US stock market to continue to retreat as the Dow Jones is pointing some 200 points lower on the opening, the Greenback should benefit from these safe haven flows and the Loonie will continue to move a little weaker.