CAD index rises as oil prices spike once again

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

US Dollar             1.2600-1.2700

Euro                     1.4200-1.4300

Sterling                1.6750-1.6850

The US Dollar index is weaker this morning as markets continue to rebound on the growing expectation that while much more transmissible than the Delta variant, the Omicron variant is not as severe and hospitalization rates are not as high.

Stocks were higher overnight on reports from China that they are injecting some 188 Billion CNY of reserves into their financial system to continue to support growth in that economy in light of the problems they are having with their property sector. Markets seem to like this move as they are all pointing higher and the US Dollar gave back some strength.

The Canadian Dollar had a huge day yesterday and a strong overnight session s the Loonie has reacted to a $4 a barrel increase in the price of oil brought on by the support China gave to their economy. Again, the oil price jumped on the back of the Omicron news, higher stock markets and the reports out of China. USD.CAD fell from a high above 1.2800 (0.7813) to where it now trades at 1.2670 (0.7893). This is huge 24 hour rise for the Loonie so I would not expect much more movement ahead of tomorrow's BOC announcement.

We get some Canadian Trade data this morning but for the most part I think markets will be watching to see what comes of the call between Putin and Biden, if it looks like there will be a further conflict in Ukraine then you will see markets get nervous and the US Dollar should push back higher.