USD index falls as China announces a massive stimulus spending program

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

US Dollar             1.2900-1.3000

Euro                     1.2850-1.2950

Sterling                1.5250-1.5350

WTI Oil (opening level) $95.25

The US Dollar index is marginally weaker this morning as markets get closer to Fed Chair Powell's speech scheduled for tomorrow. Overnight the Dollar slipped as China announced a massive stimulus spending program to boost their economy, the Euro was able to show some early strength at the expense of the Dollar (EUR.USD briefly traded back about 1.0000) but that quickly diminished when some more poor economic data came out of Germany. Once again, we will see the Euro continue to trade with a weak bias as long as the regions energy supply remains in question.

The Canadian Dollar was able to pick up some small gains against the weaker US Dollar but still remains vulnerable to the risks that tomorrow's speech brings. USD.CAD opens the day near the 1.2930 (0.7734) level and should remain below the 1.3000 level throughout the day.

Up today we get the US GDP report for the 2nd quarter and it is expected to show a drop in growth of 0.8% which would be a slight improvement on the last reading of -1.6%., this number will confirm that the US is in a technical recession but may not be as bad as expected in some quarters. Stocks at the moment are pointing a little higher and unless this GPD numbers is really poor then they should remain steady ahead of Powell's speech tomorrow.