September 5, 2025

USDCAD open 1.3790, overnight range 1.3760-1.3822, close, 1.3820

USDCAD is sinking under the weight of US rate cut enthusiasm which has led to widespread US dollar selling pressures against the majors. Today’s US nonfarm payrolls report is expected to headline this week’s soft labour reports. A 25% Fed rate cut on September 17 is fully priced in.

The domestic employment picture is ugly. Canada lost 65,500 jobs in August, after losing 40,800 in July while the unemployment rate rose to 7.2%. is on display today and expected to show Canada gained 7,500 jobs in August compared to the 40,800 lost in July.

USDCAD dropped to 1.3760 on the heels of the week US and Canadian jobs report, but USDCAD rallied to 1.3811 within 10 minutes of the release, which suggest ontinued range trading in the 1.3600-1.3900 range.

The American’s are preparing to start renegotiating the Canada, US, Mexico Free trade agreement according to the WSJ. The Office of the US Trade Representative begins public consultations beginning next month. It will be an interesting slate of meetings. Commerce Secretary and Trump sycophant Howard Lutnick on Bloomberg TV today claimed Mark Carney’s tough talk and tariff retaliation led to the 1.6% drop in Canada GDP which is why he ended the retaliation. The US believes they are dealing from a position of strength and unfortunately, they are.

WTI traded defensively in a 62.85-63.49 range. Higher than expected US crude inventories and concern about an Opec production increase beginning October 1 are driving prices lower.  

USDCAD Technical Outlook:

The intraday technicals shifted to slightly bearish with yesterday’s failure to break above resistance at 1.3850.  A drop below 1.3760 targets 1.3710 then 1.3680. USDCAD must break above 1.3850 to reignite the bullish trend.

The medium-term picture is bearish while prices remain below 1.4000 and 1.3951 which is major 61.8% Fibonacci resistance. The momentum indicators are neutral.

For today, USDCAD support is 1.3750 and 1.3710.  Resistance is 1.3840 and 1.3890. Today’s Range: 1.3730-1.3830

NFP is Priced In

Today’s nonfarm payrolls release was rather anticlimactic.  The consensus estimate is for a gain of 75,000 (previous 73,000) was out to lunch as the US only added 22,000 jobs and the unemployment rate rose to 4.3% as expected.  The results ensured that the Fed will cut rates by 25 bps on September 17.

The US 10-year Treasury yield dropped to 4.10% from 4.13% just before the release. US stock futures rose and the US dollar index dropped to 97.65 from 97.90

Trump loyalist Stephen Miren claimed no one in the White House asked him to lower interest rates.

Taking Stock

Wall Street closed with the S&P 500 at a new record high thanks to employment data-fueled rate cut fever. That sentiment carried over into Asia, and the major indexes closed with gains. Japan’s Topix rose 0.82%, Australia’s ASX 200 gained 0.51%, and Hong Kong’s Hang Seng rose 1.43%.

As of 5:45 am PDT, the UK FTSE 100 is up 0.37%, the German DAX is up 0.14%, while the French CAC 40 up 0.14% S&P 500 futures are posting a gain of 0.15%.

EURUSD

EURUSD spiked to 1.1750 from 1.1701 pre-NF) after trading in an overnight range of 1.1648-1.1692. EURUSD gains may be slowed by concern that France Prime Minister Bayrou will lose a no-confidence vote on Monday, and by the ongoing Ukraine/Russia war. The EURUSD technicals are bullish above 1.1600 and looking for a break above 1.1750 to extend gains to 1.1840.

GBPUSD

GBPUSD rallied to 1.3533 post-NFP, after trading in a 1.3426-85 range overnight. Prices were supported by better-than-expected UK data. Retail sales rose 0.6% m/m in July, while retail sales ex-fuel rose 1.3% y/y in July (forecast 1.2%). Halifax house prices rose 2.2% y/y for the three months ending in August. GBPUSD is looking for a break above 1.3540  to target 1.3620.

USDJPY

USDJPY dropped to 147.20, post-NFP after trading sideways in a 148.08-148.54 band overnight. Domestic data was mixed—labor cash earnings rose (4.1% y/y vs 3.1% in June) while household spending was unchanged at 1.4%. Auto manufacturers got a bit of good news when Trump lowered tariffs to 15% from 27.5%. US and Japan trade talks are ongoing.

AUDUSD

AUDUSD traded to 0.6573 in NY from an Asian low of 0.6510. The prospect of lower Fed rates while the RBA leaves Australian rates unchanged is supporting the currency pair.

USDMXN

USDMXN traded negatively in an 18.6695-18.7391 range overnight then dropped to 18.6223 after the US data. The USDMXN downtrend from April is intact and prices are targeting 18.4950 on a break of 18.5300

USDCNY

PBoC fix: 7.1064 vs exp. 7.1052 (Prev. 7.1052)
Shanghai Shenzhen CSI 300 rose 2.18% to 4460.32

Kenya is planning to convert US dollar-denominated Chinese debt to yuan in what Beijing hopes will be the first of many such moves for other countries. Kenya wins because the interest it pays to service the debt is reduced by 50%.

FX High, Low, Open

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics