USD index gets stronger as the Senate rejects Biden's program

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

US Dollar             1.2900-1.3000

Euro                     1.4500-1.4600

Sterling                1.7050-1.7150

The US Dollar index is marginally stronger this morning as the world's markets react to the news that President Biden's "Build Back Better" program will not pass the Senate. The administration will meet later today to try and salvage parts of the program but overnight Goldman Sachs announced that it was cutting its forecast for US Growth now that the plan was dead.

In Europe, the virus Omicron virus continues to range and further lockdown measures are being considered with Netherlands going into full lockdown until mid-January. There is also a worsening energy crisis as the weather gets cold and Russia is limiting the flow of Natural Gas in response to the Ukraine crisis and the threat of sanctions should they invade.

The Canadian Dollar is again much weaker as USD.CAD opens the day above the 1.2900 (0.7752) level. The announced on the Biden plan has pushed the price of oil below the $67.50 level which has helped to push the Loonie considerably lower. It fared a bit better against the other currencies but still remains weak, it would not surprise me if we see a test of 1.3000 (0.7692) at some point this week.

It is going to be a tough day on the North American stock markets with the Dow Jones index pointing lower by 900 points at the moment. This of course is in reaction to the infrastructure bill looking dead on arrival at the Senate and the virus continuing to expand at an unprecedented rate. These factors will help keep the US strong for the short-term.