Yesterday's stock market crash showed that it will remain volatile until the signs of a clear policy of interest rate cuts

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

US Dollar        1.3300-1.3400

Euro                1.4600-1.4700

Sterling           1.6850-1.6950

WTI Oil (opening level) $73.45

The US Dollar index is marginally weaker this morning but that is after a big jump yesterday afternoon that saw stocks in the US and Canada crash of some 1.5% in a matter of minutes. I think this move caught most investors off guard and I have read a number of reasons for the big drop but for the most part I don't think anyone really knows what caused the collapse so late in the day but it does highlight that the markets will remain very volatile until they see a clear path to interest rate cuts in the New Year.

The Canadian Dollar has held in for the moment against the US Dollar even as the TSX dropped almost 250 points yesterday afternoon. USD.CAD initially moved higher to trade near the 1.3370 (0.7479) level before pulling back a little overnight to open the day near 1.3350 (0.7491) which is right in the middle of the recent range. The Loonie did lose some small ground to the other currencies but still managed to trade in narrow ranges so overall not a bad start to the day for the Canadian Dollar. On the calendar today we get the Canadian Retail Sales report for October which is expected to show a slight uptick in activity but I doubt it will have much impact on the Loonie as the GDP report from the States will have a bigger impact.

All eyes today will be on the US final GDP report for the third quarter which is expected to show a growth rate of 5.2% which will be a lot higher than the 2.1% growth rate seen in the second quarter. A report that meets this expectation should be enough to help push the stock market back a little higher and have the dollar trade with a weaker tone. At the moment stocks are pointing to a gain of over 100 points on the opening so it should be a good day on the markets if the GDP report is positive.