USD index weakens as stock and crypto markets surge

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

US Dollar             1.2950-1.3050

Euro                     1.3050-1.3150

Sterling                1.5050-1.5150

WTI Oil (opening level) $84.80

The US Dollar index is significantly weaker this morning as stock markets around the globe are all higher overnight. The markets are reacting to the 0.75% interest rate hike from the European Central bank yesterday and to comments from ECB President Lagarde that more interest rate hikes are coming for the region to help combat runaway inflation. In addition, Energy ministers from around the region are meeting today to try and come up with a solution to fight off the coming energy crisis this winter and to ensure that they do not have to turn off the lights at some point. I am not sure this move for the Euro is sustainable in the long-term but for now it has taken the limelight away from the US Dollar.

The Canadian Dollar was able to take advantage of the weaker US Dollar and it out performed a lot of the other currencies as well. USD.CAD opens the day much lower from its highest level earlier this week and trades just below the 1.3000 (0.7692) level to start the day. The interest rate hike by the Bank of Canada on Wednesday and the weaker dollar are undoubtedly helping the Loonie at the moment but like the Euro the market is susceptible that the Loonie can hold onto this strength. 

On the calendar today we get the Canadian Employment report for August, after a 30K drop in July the markets are looking for a small increase of 15K last month. As we have seen many times in the past this number can be quite volatile and another negative report could be enough to push USD.CAD back higher.

After a positive day yesterday, stocks are again poised for another strong day so look for the US Dollar to remain vulnerable to another dip at the expense of the Euro and Pound.