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Keep an eye on GBP as the UK enters energy crisis


15.09.2021
Keep an eye on GBP as the UK enters energy crisis

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

US Dollar             1.2650-1.2750

Euro                     1.4950-1.5050

Sterling                1.7500-1.7600

 

The US Dollar Index is marginally lower this morning but that is only after a small rally yesterday when the reported US year-over-year inflation rate in August slowed to 4%. The rate came in lower than was expected by the market giving investors pause that perhaps inflation is only going to be high in the short-term and may give the Federal Reserve a little more leeway in reducing their stimulus program.

 

The UK may be a place to watch over the next few months as it looks like they are heading into another crisis with the cost of electricity going through the roof. Two major electricity suppliers in the UK have declared bankruptcy and a major electricity conduit from France is closed due to a major fire. If this continues you will see Sterling trade weaker and the Conservative government take a big hit in the polls.

 

The Canadian Dollar was mixed over night as USD.CAD opens the day at the 1.2690 (0.7880) level after it had traded lower throughout the afternoon and evening session. Today markets will be watching the Canadian inflation report where we are expecting a year-over-year inflation rate of 3.7%. This rate will be lower than the July report but still ahead on the band set by the Bank of Canada for sustained growth.

 

We also get some secondary data out on the US economy so we could have a very volatile day, make sure you get your orders in early and take advantage of the movement.

 



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Sterling                1.5700-1.5800