US Dollar Surges to One-Month High Amid Global Economic Headwinds and Market Uncertainty

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

US Dollar        1.3425-1.3525

Euro                1.4600-1.4700

Sterling           1.7000-1.7100

WTI Oil (opening level) $73.24

The US Dollar Index was stronger overnight and has reached a one-month high this morning as both the Euro and Pound suffered significant declines over the last 24 hours. Once again it is US interest rates staying high for longer periods, expansion of the Middle East conflict and now the real threat of another Donald Trump presidency that are weighing on stock markets and helping to push the Dollar higher. In the short-term there does not seem to be a lot on the cards to change this so look for more US Dollar strength in the coming days.

The Canadian Dollar is weaker against the US Dollar as USD.CAD traded as high as 1.3500 (0.7407) overnight before pulling back a little this morning. The Loonie did fare better than the other currencies as the Loonie was able to pick up some small gains against the other currencies. Our Dollar will be front and centre shortly as we get the annualized inflation rate for December and the market is expecting inflation will have ticked up to 3.4% from 3.1% in November. The core rate is expected to remain at 2.8% which may give the Bank of Canada some comfort but it certainly will not lead them to cut interest rates any time soon.

Stocks are looked set to drop on the opening as the US markets get back to full strength after yesterday's holiday, look for more US Dollar strength as the day moves on.