USD index appreciates as stocks sell off

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

US Dollar             1.2575-1.2675

Euro                     1.4225-1.4325

Sterling                1.7000-1.7100

The US Dollar index is much higher this morning as stock markets around the world sell-off in response to the threat of the immanent Russian invasion of Ukraine and the likely signaling this week by the Federal Reserve that they stand ready to increase interest rates in March of this year to start fighting inflation.

In response to the invasion threat the US has ordered family members of embassy staff out of Ukraine and Biden floated the possibility of sending US troops to the Baltic countries to shore up their defenses, this will surely anger the Russians and place more pressure on the situation. As all of this unfold stocks will remain vulnerable and the US Dollar should remain strong, It is not just stocks that are being sold off, Bitcoin opens this morning near $33K which means the crypto currency has dropped more than 50% since it's November high.

The Canadian Dollar is considerably weaker this morning as USD.CAD opens the day above the 1.2600 (0.7937) level as it once again fell victim to a stronger US Dollar and could not hold onto its strength from last week.

It will be a busy week for the markets as not only do we get the Federal Reserve announcement we also get a Bank of Canada interest rate announcement, both on Wednesday. I will be interested to see if the BOC talks about interest rate hikes here in Canada later this year. Up today we get the Canadian Manufacturing Sales report for December but with all that is going on in the market I don't think it will influence the Loonie. Look for the Loonie to continue to trade with a weak bias until we hear from the Federal Reserve.

The Dow Jones Industrial Average is pointing down over 130 points on the opening this morning, it is going to be a very messy day on the markets, hopefully they will recover a bit as the day goes on.