Investors sell stocks ahead of tomorrow's speech from Federal Reserve Chair

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

US Dollar             1.2550-1.2650

Euro                     1.4800-1.4900

Sterling                1.7300-1.7400

The US Dollar Index is marginally higher this morning as markets await tomorrow's speech from Federal Reserve Chair Powell. Most investors are selling stocks ahead of the speech where they hope to get a further sense of plans from the Fed as to what they will do with their stimulus plan and interest rates going forward. The big question will be how much as the slowdown caused by the Delta variant changed the plan of the Fed to reduce stimulus this year and increase interest rates next year? Investors will also want to see what the Fed says about inflation and whether they still think that high inflation will only be around for the short-term, we should see some enhanced volatility in the FX markets tomorrow with whatever he says.

The Canadian Dollar continues to range trade as USD.CAD opens the day at the 1.2600 (0.7937) level, with the oil price stabilizing the Loonie has not been able to extend any further significant gains.

We may see some early volatility as the markets get a look at the 2nd quarter GDP out of the US and a growth rate of 6.7% is expected which is slightly higher than that the last report. A strong GDP report should help the US Dollar and could see USD.CAD move back towards the 1.2650 (0.7905) level that we saw earlier in the week.