Markets are taking a slight breather from their recent runs which have pushed stocks to record levels and oil to pre-pandemic highs. The Canadian dollar is flattish and in the middle of the range of where it has been trading since the beginning of the year. As we have noted previously, USD to CAD is no longer tightly correlated to stocks and today is another case in point. There are not a lot of market moving economic data points on the calendar but tomorrow’s inflation figures in the US will be watched closely in light of the debate over the stimulus bill and the best path forward for the Fed on monetary policy. As we have previously noted, as far as the USD to CAD exchange rate is concerned, a lot will come down to to how quickly the Fed moves (or signals a move) to pull back on monetary stimulus relative to how quickly the Bank of Canada does so. In that vein, a speech by Fed Chairman Powell and a speech by Deputy Governor Lane of the Bank of Canada, both of them tomorrow, will also be monitored closely. The impeachment trial in the US will be a non-event as far as the markets are concerned.
