The markets have started the week on a positive note with global sentiment improving. Stocks are trading up, oil is flat and the US dollar is down across the board. The Canadian dollar is up 0.2% against the US dollar but underperforming most other major currencies. With the notable exception of inflation figures on Wednesday, there is little on the Canadian economic calendar this week. As such, we expect the USD/CAD rate to be largely driven by global developments, and in particular the US political scene. The prospects of a stimulus bill prior to the election are still alive but dimming quickly. There is also concern about a prolonged election fight if President Trump does not accept the result of a potential defeat. That would make a stimulus bill even harder to get after the election. The resurgence of the coronavirus globally and the economic disruption is priced into the markets but needless to say it is being watched closely by market participants for any material changes in the pandemic.
