Canadian Dollar takes advantage of the rising oil prices

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

US Dollar             1.2550-1.2650

Euro                     1.4550-1.4650

Sterling                1.7100-1.7200

The US Dollar Index is marginally higher this morning as concerns about rising commodity prices, possible US government default on its debt if the debt ceiling is not raised in the coming days and a possible spread in China of the Evergrande situation have again have spooked investors and driven stocks lower. In China another large property developer appears ready to default on a bond payment, Fantasia Holdings is set to default on a large payment threatening the Chinese economy with a massive ripple effect if these companies continue to fail. In the US the Democrats are blaming the Republicans for not raising the debt ceiling, if it is not raised in the coming weeks the Federal Reserve will run out of money and they will default on it's Treasury Bond repayments plunging the US economy into recession according to Treasury Secretary Yellen. The game of chicken with the US economy is in plain view.

The Canadian Dollar has been able to extend some overnight gains against its Southern neighbour as USD.CAD opens the day at the 1.2590 (0.7943) level, it traded as low as 1.2565 (0.7959) level at one point during the overnight session. The principal reason is that oil prices like other energy prices continue to rise with the WTI price hitting $78.40 a barrel. It looks like these energy prices will stay elevated and inflation will remain a threat for a while so look for the Loonie to be able to make some smaller gains over the coming days.

North American Stocks are pointing higher on the opening so the US Dollar may give back a little of its gains from overnight trading to start the day but overall with everything that is going on the US Dollar should remain trading with a strong bias.