GBP surges as new UK finance minister cancels the tax cut plan

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

US Dollar             1.3750-1.3850

Euro                     1.3400-1.3500

Sterling                1.5550-1.5650

WTI Oil (opening level) $85.26

The US Dollar index starts the week on its back foot as the British Pound has pushed forward on the news that new finance minister Hunt has scrapped almost all of the Government's tax cut plan. Both the UK Bond market and the Pound surged on this report, GBP.USD rose to trade at 1.1314 from a low of 1.1210 and GPB.CAD rose to trade at 1.5600 as I write.

The Canadian Dollar was able to take advantage of the weaker US Dollar as USD.CAD has fallen to trade below the 1.3800 (0.7246) level this morning. As this is a direct result of the Pound pushing the US Dollar lower short-term buyers of US Dollar may want to grab some on this dip. Again, there is little positive news coming out of Canada at the moment to help support the Loonie so these dips may be few and far between.

A quiet start to the calendar this morning, stocks are pointing higher after a tough day Friday so we may see a little more US Dollar weakness throughout the day. On Wednesday, FX market focus will move to the Canadian Dollar as we get the latest inflation report where it is forecast that inflation will have dropped slightly in September.