USD index gets stronger as global stocks weaken

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

US Dollar             1.3550-1.3650

Euro                     1.3450-1.3550

Sterling                1.5400-1.5500

WTI Oil (opening level) $87.00

The US Dollar index is marginally stronger this morning as the expectation of a possible change on direction by the world's central bankers seems to have come to a quick end. This morning the Reserve Bank of New Zealand announced a .50% interest rate hike and stated that they considered going even higher. This was in contrast to the Central Bank of Australia that only increased interest rates by 0.25% yesterday, a move that pushed stocks a lot higher on the hope that the Fed may start to decrease the pace of their interest rate hikes. 

Global stocks are all lower again this morning and after a great day yesterday the Dow Jones is pointing some 225 points lower on the opening, the US Dollar ha resumed its strengthening bias and US bond rates are on the rise once again. Helping to push the Dollar higher is the expectation at the next OPEC meeting the group will announce a major production cut which will push the oil price a lot higher and put more pressure on global inflation. I would imagine that the Biden administration is doing everything it can to prevent this but it remains to be seen just how successful they will be.

The Canadian Dollar broke below the 1.3520 (0.7396) level yesterday before giving back those gains overnight and now trades back near the 1.3600 (0.7353) level to start the day. The Loonie was able to hold onto current levels against the Euro and Pound so that tells me that the Loonie still trades at the mercy of the US Dollar and unless the Greenback weakens there is little chance of sustained Canadian Dollar strength even from a much higher oil price.

Up today we get some Canadian trade data so we get a further picture of the state of the Canadian economy, and then this will be followed on by US and Canadian Employment numbers for September on Friday. Ahead of these reports the US Dollar should remain strong and stocks will struggle to recover yesterday's big gains.