After recovering a bit over the last week, the US dollar is once again at near the lowest point against the Canadian dollar that it has seen since late February, before the Covid shutdowns. The inflation data in the US came in at a higher level than expected but did nothing to firm up the US dollar. The risk-on sentiment globally, as exhibited by higher equity markets this morning, is driving the selling in the US dollar this morning. The Canadian dollar is up by 0.25% but is actually underperforming given that oil is up near 2% and the US dollar is broadly down. There is really very little direction for the markets overall. Everyone seems to be waiting for the “next shoe to drop” in one way or another. Sentiment is very negative about the future of the US dollar but that currency continues to be a favourite risk-haven so that its future is closely tied to overall economic sentiment.
