September 17, 2025

USDCAD open 1.3754, overnight range 1.3737-1.3762, close, 1.3740

USDCAD traded quietly ahead of this morning’s Bank of Canada meeting.  Yesterday’s tame inflation report combined with the early ugly employment data all but guaranteed a 25 bp rate cut.  The BoC is likely going to hint at further monetary policy easing due to weak to non-existent economic growth. Fortunately, for USDCAD bears, anticipation of a matching Fed rate cut, and a dovish Fed statement will limit USDCAD gains.

WTI oil consolidated yesterdays gains in a 63.84-64.67 band as traders assess the risks from the FOMC decision, and the impact of Ukrainian drone strikes on Russian oil infrastructure. However, support from concerns about supply disruption from Russia are offset by increased Opec production. Canadians will be smiling when the fill up with gas as prices are expected to fall as much as 10 cents/liter as retailers switch to winter gas.

US Housing starts and building permits data are due.

USDCAD Technical Outlook:

The intraday technicals are bearish, below 1.3790 and looking for a break below support at 1.3720 to extend losses to 1.3650. A rally above 1.3800 would negate the downtrend.

The medium-term technicals are unchanged and suggest that USDCAD is consolidating between 1.3600 and 1.4000 albeit with a bearish bias now. A break below 1.3600 sets the stage for losses to 1.3300 while a move above 1.4000 puts 14400 in play.

For today, USDCAD support is 1.3710 and 1.3680. Resistance is 1.3790 and 1.3830. Today’s Range: 1.3710-1.3790

FOMC Day

The FOMC meeting could be rather entertaining as it is the first meeting with new governor and Trump lackey, Stephen Miran, casting a vote. Perhaps he will make a point and vote for a 1.0% cut. On the other side of the table, Governor Lisa Cook, who was fired by Trump then unfired by a federal court and a court of appeal, could take out her anger on Miran. She would crush him in straight-up combat. Nevertheless, a 25 bp rate cut is baked in. The Committee can make all the noise they want about inflation concerns, but it doesn’t matter—rates are heading lower.

Taking Stock

Asian equity indexes slipped ahead of the FOMC decision. Japan’s Topix dropped 0.71% and Australia’s ASX 200 lost 0.67%. Positive noises from the China/US meeting in Madrid helped to lift the Hong Kong Hang Seng index 1.78%.

As of 5:30 am EDT, European equities gave up early gains and turned negative except the UK FTSE 100 which is up 0.23%.  The French CAC 40 is down 0.25%, he German DAX  and S&P 500 futures are flat.  The US Dollar Index (DXY) is 96.82, Gold is 3671.01 and the US 10-year Treasury yield sits at 4.024%.

EURUSD

EURUSD is consolidating this week’s gains in a 1.1833-1.1873 range. Prices are supported by aggressive FOMC rate cut speculation even as the ECB plans to leave its benchmark rate unchanged for now. Eurozone inflation ticked lower (actual 2.0% y/y from 2.1% in July). The EURUSD technicals are bullish above 1.1660 with the break above 1.1800 opening the door to a test of resistance in the 1.2000 area.

GBPUSD

GBPUSD bounced in a 1.3630-1.3660 range and is in the middle of that band in early NY trading. UK inflation data was as expected but sticky enough to reduce the odds for BoE rate cuts this year. Meanwhile, the Brits have donned their best bib and tucker as they pay homage to Trump.

USDJPY

USDJPY drifted in a 146.21-146.68 range. The reduction of US tariffs to 15% effective yesterday is helping to pave the way for the BoJ to raise interest rates. The narrowing of the Japan and US interest rate differentials is weighing on prices. Japan’s trade data had little impact on trading.

AUDUSD

AUDUSD traded defensively in a 0.6666-0.6690 band as pre-FOMC dollar selling pressure offset support from expectations that the RBA will leave rates unchanged at 3.6% at its September 30 meeting. The Westpac Leading Index was -0.5% compared to 0.14% in July, which suggests economic momentum is slowing.

USDMXN

USDMXN traded sideways in an 18.2741-18.3887 range as it consolidated losses from last week ahead of today’s FOMC meeting. The dovish outlook for US interest rates contrasts with Banxico’s steady rate outlook and is fueling the losses. The short-term technicals are bearish below 18.5600 and looking for a test of support at 17.67.

USDCNY

PBoC fix: 7.1013 vs exp. 7.1021 (Prev. 7.1027)
Shanghai Shenzhen CSI 300 rose 0.61% to 4561.02

US-China close to agreeing to TikTok deal—That’s when the Trump administration, under the guise of National Security, forces successful foreign companies to sell to Americans.

Beijing announced measures to boost service consumption in areas such as culture, sports, and healthcare.

China said officials are close to finalizing details for Trump to visit at an unnamed date.

FX High, Low, Open

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