January 16, 2026

USDCAD open: 1.3893, overnight range 1.3885-1.3899, close 1.3893

It doesn’t matter what you think about Prime Minister Mark Carney — he makes things happen. It was his global stature and pedigree that won him an audience with Chinese President Xi Jinping, which was fundamental in resetting a relationship that was annihilated by Justin Trudeau. Trudeau was seen as an empty suit and Washington’s “running dog.”

Mr. Carney will be returning from Beijing with Xi Jinping’s agreement to lower tariffs on some canola imports from 75.8% to 15%, beginning in March, while 100% tariffs on canola meal and 25% tariffs on lobster, crabs, and peas will start March 1. In return, Canada slashes levies on Chinese electric vehicles (EVs) to a mere 6.1% from 100%, but only for the first 49,000 vehicles. By 2031, the quota will have risen to 70,000.

Carney hopes to attract further Chinese EV investment and even an EV manufacturing plant. The news is sure to ruin Ontario Premier Doug Ford’s day.

WTI oil prices traded in a 59.93–60.02 range as traders continue to balance the risk (diminishing) of US intervention in Iran against increased crude supply as the US sells its stolen Venezuelan crude. (If Trump returned the proceeds to the Venezuelan people, it would not be theft.) As of yesterday, the American navy has hijacked six tankers.

Today’s data includes Canadian housing starts and US capacity utilization and industrial production.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while prices are above 1.3870 which is the bottom of a minor uptrend channel and looking to test resistance in the 1.3960 area. A drop below 1.3870 targets 1.3820.

The medium-term outlook remains bullish, but momentum is waning.  Prices are continuing to consolidate in a 1.3820-1.3920 range.

For today, USDCAD support is at 1.3870 and 1.3810. Resistance is at 1.3920 and 1.3960.
Todays Range 1.3840-1.3910

Trump Awarded Caracas Peace Prize

Donald Trump is basking in the glow from what he imagines is another prestigious award. Venezuelan opposition leader Maria Machado gave Trump her Nobel Peace Prize in a blatantly obvious attempt (except to Trump) to bribe Trump into supporting her bid for the Venezuelan presidency. Trump still does not have a Nobel Peace Prize. All he has is a golden medallion with a pretty ribbon.

FOMC Officials Push Back

FOMC policymakers appeared united in their disdain for Trump after he used his trained monkeys in the Justice Department to subpoena the Fed Chair. Recent comments suggest the FOMC will be more than content to leave interest rates unchanged for the foreseeable future.

Governor Michael Barr called the inquiry an assault on the independence of the Fed and then said that benchmark interest rates are at the right level. Kansas City Fed President Jeff Schmid said inflation is too hot and that Trump’s policies could further fuel economic momentum. San Francisco Fed President Mary Daly said policy is in a good place.

Taking Stock

Asian equity markets closed with small losses except for Australia’s ASX 200, which gained 0.48%. Japan’s Topix lost 0.28%, while Hong Kong’s Hang Seng Index fell 0.29%.

As of 5:30 am PT, European bourses are lower. The UK FTSE 100 is flat, the French CAC-40 is down 0.68% and the German DAX has lost 0.26%. S&P 500 futures are up 0.17%, the US Dollar Index is 99.24, the US 10-year Treasury yield is 4.192%, and gold (XAUUSD) is 4597.77

EURUSD

EURUSD drifted in a narrow 1.1603–1.1623 range due to a lack of catalysts. ING analysts are suggesting that steady ECB rates of around 2.0% are weighing on the single currency, as it is used as the funding currency for carry trades with higher-yielding emerging market currencies. German December inflation was confirmed at 2.0% y/y and ignored.

GBPUSD

GBPUSD traded in a 1.3371–1.3413 range, and it is probing the top of the band in early NY. The November uptrend line was shattered last week, and the short-term outlook is bearish while prices are below 1.3450. Yesterday’s UK GDP was better than expected but still weak and suggests that economic weakness will persist this year.

USDJPY

USDJPY traded slightly defensively in a 157.98–158.70 range after the threat of FX intervention moved up a notch and could see the Fed participate. Finance Minister Satsuki Katayama reminded traders that a joint statement signed with the U.S. last September “was extremely significant and included language on intervention.” USDJPY was further weighed down by talk that the BoJ may raise rates as soon as April.

AUDUSD

AUDUSD traded quietly in a 0.6695–0.6710 range. The currency pair is being underpinned by firmer commodity prices, particularly iron ore, and the RBA’s apparent hawkish bias.

USDMXN

USDMXN is consolidating yesterday’s losses in a 17.6430–17.6728 range, with losses fueled by peso demand for carry trades and hopes for lower US rates later this year.

China

PBoC Fix: 7.0078 vs exp. 6.9722 (prev. 7.0064)
Shanghai Shenzhen CSI 300 fell 0.41% to 4731.87

FX High, Low, Open

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