October 6, 2025

USDCAD open 1.3955, overnight range 1.3942-1.3968, close, 1.3951

USDCAD traded uneventfully overnight and was unscathed by the FX volatility that roiled EURUSD and USDJPY. Traders even shrugged off concerns around the latest US government shutdown.

Prime Minister Mark Carney is in Washinton on Tuesday for a meeting with Trump. No one expects any tariff break-throughs because Trumps penchant for untruths.  

If Trump had been an old school FX trader, the association’s slogan of “Our word is our bond” would have been “my word is rather useless.”

WTI oil prices gapped higher from Friday’s 60.69 close and traded in a 61.36-62.11 range before easing back to 61.71 in NY. Opec surprised markets by announcing a 137,000 barrel/day increase for November, which was identical to Octobers increase and well below the rumoured hike of up to 500.000 bpd.. Gains were capped by concerns of a near-term oil glut.

There are no US or Canadian economic reports of note today.

USDCAD Technical Outlook:

The intraday technicals are bullish while trading above the 1.3890-1.3900 range and looking for a break above the 1.3970 are (4 hour chart) to extend gains to 1.4020. A move below 1.3930 targets 1.3890.

The medium-term technicals are bullish but need to see a decisive break above the 1.4000 area to set the stage for further gains to 1.4120. Failure to take out 1.40000 risks further 1.3700-1.4000 consolidation.

For today, USDCAD support is 1.3920 and 1.3840. Resistance is 1.3990 and 1.4020. Today’s Range: 1.3920-1.3990.

Geopolitics Gives Markets a Bumpy Ride

The French government resigned within a few hours of Prime Minister Sebastien Lecornu naming his cabinet. Lecornu was the fifth Prime Minister since President Macron’s decision to call a snap election on June 9, 2024. “Vive le Dysfonctionnement politique.”

Japan elected its first-ever female Prime Minister, a heavy-metal, Iron Maiden fan who favours more government stimulus, lower interest rates, and tighter security ties with Taiwan.

He continues to threaten mass layoffs if Democrats fail to resolve the budget impasse and is vowing to slash government payrolls. He is also trying to deploy troops into Oregon despite a Federal Judge—whom he appointed—ruling that he had exceeded his constitutional authority.

Russian President Putin took exception to Vice-President Vance’s comment that the U.S. could supply Ukraine with long-range Tomahawk missiles. Putin said, “This will lead to the destruction of our relations, or at least the positive trends that have emerged in these relations.”

Taking stock

Asian equity indices were mixed. The LDP party elections in Japan fueled a stock-market rally that lifted the Topix by 3.10 % and the Nikkei by 4.75 %. Many regions in Australia were closed for a Labour Day holiday and the ASX 200 closed virtually unchanged.

As of 5:40 a.m. PDT, European equities are mixed. The UK FTSE 100 has risen 0.21 %, the German DAX is up 0.24 %, and the French CAC-40 is down 1.32 %. S&P 500 futures are up 0.35%, and the U.S. Dollar Index (DXY) gapped higher from Friday’s close of 97.70 to 98.30 in New York. Gold (XAUUSD) soared to 3949.58 after closing at 3886.84 before easing to 3929.51 in New York. The U.S. 10-year Treasury yield is 4.166%.

EURUSD

EURUSD dropped from Friday’s close of 1.1744 to 1.1652 before edging to 1.1656 in early New York trading. Political dysfunction in France sent OAT yields higher and equities lower. Eurozone retail sales were weaker than expected (actual 1 % y/y vs 2.1 % in July), which didn’t help sentiment. Intraday technicals are bearish; the break below 1.1680 targets more losses toward 1.1575.

GBPUSD

GBPUSD traded lower in a 1.3419–1.3465 range, mainly due to broad USD strength amid French and Japanese political turmoil and the ongoing U.S. government shutdown. GBP upside faces headwinds after the OBR downgraded productivity forecasts and the government signalled future tax hikes.

USDJPY

USDJPY soared from 149.04 to 150.47 after Sanae Takaichi’s election as LDP leader and presumptive Prime Minister. She is known to favour further government stimulus and lower rates, driving the Topix to a record high close.

AUDUSD

AUDUSD churned within a 0.6584–0.6619 band, virtually identical to Friday’s range. The pair remains underpinned by the RBA’s less-dovish outlook and firm commodity prices.

USDMXN

USDMXN rallied from 18.3703 to 18.4900 on broad-based USD demand following political developments in Japan and France, alongside the continuing U.S. government shutdown. September consumer-confidence data is due today (August 46.5).

USDCNY

PBoC fix: 7.1055 vs exp. 7.1166 (Prev. 7.1089) – CLOSED
Shanghai Shenzhen CSI 300 rose 0.45% to 4640.69 – CLOSED

China’s Golden Week holidays continue

FX High, Low, Open              

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