September 18, 2025

USDCAD open 1.3775, overnight range 1.3766-1.3801, close, 1.3775

USDCAD shrugged of the Bank of Canada’s first rate cut in six months. It was widely expected following a series of weak economic reports.  The BoC appears to be willing to cut rates further after they noted that inflation pressures were easing somewhat.

However, when the Fed announced a 25 bp rate cut, USDCAD dropped to 1.3727 but was back at 1.3765 in the blink of an eye. The Fed failed to deliver the aggressive dovish bias that was anticipated.

WTI oil prices traded sideways in a 63.45-64.26 range with gains capped by the latest Fed rate cut. Prices will remain stuck in a 62.00-66.00 range with supply disruption concerns from the Russia and Ukraine war offset by Opec production increases.

USDCAD Technical Outlook:

The intraday technicals are bearish below the 1.3780-90 area but there is a mild intraday bullish momentum following the bounce off of support in the 1.3720-25 zone yesterday.  A break above 1.3790 targets 1.3890.

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 1.3720 puts 1.3550 in play.

For today, USDCAD support is 1.3720 and 1.3680. Resistance is 1.3790 and 1.3850. Today’s Range: 1.3730-1.3830

Jobless Claims Recovers

So the labour market did not fall of a cliff. Its weakening, but not to the extent analysts were concerned about. Weekly jobless claims rose 231,000 last week, 33,000 better than the week before and 9,000 lower than estimated. Apparently, lasts weeks numbers were skewed higher my employment fraud in Texas.

The Philadelphia Manufacturing Survey rose 24 points to 23.2 in September, (August -0.3)ts highest reading since September.

The US dollar and Treasury yields ticked higher on the news.

FOMC Doves AWOL

The FOMC failed to live up to its advanced billing—instead of a sharply dovish pivot the Fed delivered a “risk management cut.” Nine of nineteen policymakers are projecting two more rate cuts in 2025, but Powell said decisions will be taken on a meeting-by-meeting basis. Financial markets were unimpressed. The initial dovish reaction to the FOMC statement faded and Wall Street and the greenback closed on a mixed note while 10-year Treasury yields bounced to 4.096% from a low of 3.99%.

Taking Stock
Asian equity indexes were choppy and closed mixed. Japan’s Topix rose 0.41% and Australia’s ASX 200 dropped 0.83% following a weak employment report. The Hong Kong Hang Seng closed with a 1.35% loss.

As of 7:00 am EDT, European equities are in positive territory. The UK FTSE 100 is up 0.17%, the German DAX has gained 1.16%, and the French CAC 40 is up 1.10%.

S&P 500 futures have gained 0.77% due to an injection of optimism after Nvidia announced a $5.0 billion investment in Intel. The US Dollar Index (DXY) is 96.91, Gold is 3667.96, and the US 10-year Treasury yield sits at 4.052%.

EURUSD

EURUSD traded choppily in a 1.1780-1.1849 range overnight and is at the top of that band in early NY trading. The rally is occurring against the background of widespread labour strife in France—teachers, medical staff and train engineers are some of the unions that have walked off the job to protest any type of austerity budget. Norway’s Norges Bank cut its benchmark rate by 25 bps to 4.0%, as expected. The EURUSD uptrend is intact above 1.1750.

GBPUSD

GBPUSD rose from 1.3586 in Asia to 1.3661 in NY then dipped to 1.3615 after the Bank of England left rates unchanged at 4.0% as was expected and reduced the pace of its quantitative tightening program. GBPUSD technicals are bullish above 1.3570.

USDJPY

USDJPY had a bid and traded in a 146.77-147.53 range. Prices recovered most of this week’s losses post-FOMC, climbing from yesterday’s low of 145.50 to the overnight peak. It was a sell the “rumour-buy the fact” rally after the Fed failed to live up to the dovish hype. Weaker than expected Machinery Orders in August didn’t help. Traders are waiting for the BoJ monetary policy decision tomorrow.

AUDUSD

AUDUSD fell from 0.66052 at the NY close to 0.6616 after the Australian employment data was released but recovered all the losses as it rebounded to 0.6659 in NY. Australia lost a total of 5,400 jobs, but the unemployment rate was unchanged at 4.2%.

USDMXN

USDMXN traded erratically in an 18.2423-18.3573 range and is close to the bottom in NY. The currency pair is on the defensive because the Fed dot-plot projections suggested another 50 bps in rate cuts by year end while Banxico is expected to leave rates unchanged.

USDCNY

PBoC fix: 7.1085 vs exp. 7.1113 (Prev. 7.1013).
Shanghai Shenzhen CSI 300 rose 0.61% to 4561.02.

Hong Kong Monetary Authority lowered its base rate by 25bps to 4.50%, as expected. FT reports China is ending its anti-trust probe into Google do to ongoing US/China trade talks. The report suggests it’s merely a tactical shift as it shifts the focus to Nvidia.

FX High, Low, Open

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