Euro and GBP might be under pressure soon

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

US Dollar             1.2625-1.2725

Euro                     1.4750-1.4850

Sterling                1.7300-1.7400

The US Dollar Index is marginally stronger this morning and stocks are a little lower as investors continue to be nervous about global growth. In addition to the Evergrande situation investors are now watching an electricity shortage in China that may impact manufacturing growth and reduce the overall growth rate in the country going forward.

Gas stocks in the UK and the rest of Europe are very low as the pandemic has limited the supply of fuel from Norway and Europe leaving serious concerns about the supply for the coming cold months. In addition, the UK government has had to backtrack on some of their Brexit polices and allow foreign work visas for truck drivers to enter the country to try and solve some of their distribution woes. I think Europe could be in for a very hard winter this year and it will put continued pressure on the Euro and Pound.

The Canadian Dollar is stable at the moment as it traded in a tight range overnight, USD.CAD opens the day at the 1.2655 (0.7902) level and should stay within the range throughout the day.

Most investors will be watching the debate in Congress this week to see if they will pass President Biden's infrastructure plan and also if the Senate will agree to increase the debt ceiling for the government. If the debt ceiling is not raised by Friday the the Government will shutdown and the US Treasury will default on its payments and you will see increased volatility in the markets.