British Pound hits record lows

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

US Dollar             1.3600-1.3700

Euro                     1.3100-1.3200

Sterling                1.4700-1.4800

WTI Oil (opening level) $84.18

The US Dollar index is stronger to start the new week and this is after another strong day on Friday that saw the British Pound hit record lows and brought into the possibility of the Pound and Greenback hitting parity before the end of the year. The British Prime Minister Liz Truss announced a plan to dramatically cut taxes and increase borrowing to try and spur economic activity in the face of rising interest rates in the UK, GBP.USD fell in extreme volatile conditions to trade at 1.0420 overnight before climbing back to trade at 1.0800 this morning, GBP.CAD fell to trade at 1.4160 before pulling back to trade at 1.4728 this morning. Clearly financial markets are very concerned about this plan by the UK government in the face of the Bank of England increasing interest rates to fight inflation and they are showing that concern by punishing the Pound.

The Canadian Dollar continues to weaken off against the US Dollar as USD.CAD hit a new two-year high on Friday and looks set to move higher this morning. The Currency pair trades at 1.3670 (0.7315) which though it is picking up some gains against the other currencies it still looks like there is room for it to drop further against the US Dollar.

Not much on the calendar today, stocks after a tough day on Friday are again pointing lower to open the day, US Tech companies are starting to report their financial results this week and poor results could result in a big drop in the NASDAQ which would pull other indices lower with it. The Dollar has come a long way in the last couple of days so it may fall back a little but there is no reason to expect the trend of a stronger US Dollar has run its course so I think we can expect USD.CAD to move higher over the coming days.