October 16, 2025
USDCAD open: 1.4040, overnight range 1.4023-1.4058, close, 1.4044
WTI oil popped from 58.18 yesterday to 59.10 overnight before retreating to 58.65 in NY. The rally occurred on the back of Trump claiming that Indian Prime Minister Narendra Modi agreed to stop buying Russian crude. Indian officials have not confirmed the statement but said the country prioritizes protecting consumers.
There are no Canadian economic reports but there are plenty of FOMC officials talking today.
USDCAD Technical Outlook
The USDCAD technical picture is unchanged from yesterday. The intraday technicals are bullish above 1.3970 but looking over-extended suggesting that resistance at 1.4110 will contains gains today.
The medium-term technicals remain bullish above 1.3970 (200-day moving average) and are looking for a sustained close above 1.4050 to support further gains to 1.4270. Only a move below 1.3820 would turn the outlook neutral.
For today, USDCAD support is at 1.4010 and 1.3970. Resistance is at 1.4070 and 1.4110.
Today’s Range: 1.4010-1.4070
1,2,3,4, I Declare a Trade War
Earlier this week, Trump took to Truth Social to say “Don’t worry about China. It will be fine. Highly respected President Xi just had a bad moment.” Perhaps it is not fine because yesterday, in response to a question asking “if the US and China were heading to a trade war,” Trump answered “Well, you’re in one now.”
China’s response to geopolitical tensions was to drastically expand its rare earth and critical material export controls, moving beyond raw minerals to include stringent licensing requirements for the export of rare earths themselves, associated technologies (from mining to magnet manufacturing), and key semiconductor materials.
Taking Stock
Asian equity markets closed with more gains. Japan’s Topix gained 0.62%, Australia’s ASX 200 rose 0.86%, and Hong Kong’s Hang Seng was unchanged.
As of 5:30 AM PDT, European indexes are mixed. The UK FTSE 100 is down 0.21%, while the French CAC-40 is up 0.92%, and Germany’s DAX is flat. S&P 500 futures are up 0.29%, and the U.S. Dollar Index (DXY) is 98.62. The U.S. 10-year Treasury yield is 4.013%, while gold (XAUUSD) is 4250.62 after setting a new record high of 4251.12 just before.
EURUSD
EURUSD extended yesterday’s gains and traded in a 1.1642-1.1675 range. The gains were largely due to French politics and the improved odds that Prime Minister Sebastien Lecornu will survive two non-confidence votes today after he agreed to delay President Macron’s pension reform initiative.
GBPUSD
GBPUSD popped higher, rising from 1.3394 to 1.3443, where it sits in early New York due to slightly better-than-expected UK data today. UK GDP grew 0.1% in August, although the news was offset by the downward revision to July GDP, which fell 0.1%. The outlook for growth in the next few quarters is “set to be muted,” according to Raj Badiani, Economic Director at S&P Global.
USDJPY
USDJPY extended yesterday’s losses and hit 150.52 before bouncing back to 151.40 just before New York opened. The gains stemmed from reports that LDP leader Sanae Takaichi’s hopes of becoming Prime Minister improved following coalition talks with the Innovation Party. Then BoJ governor Naoki Tamura reiterated his arguments for the need to increase rates.
AUDUSD
AUDUSD traded in a 0.6480-0.6516 range, with the low occurring on the heels of a weaker-than-expected employment report. Australia gained 14,700 new jobs (forecast 17,000), and the unemployment rate jumped to 4.5% from the upwardly revised 4.3% level in July.
USDMXN
USDMXN traded defensively in an 18.4175-18.4740 band due to ongoing hopes for additional Fed rate cuts and because of the generally softer U.S. dollar versus the majors. Mexican Economy Minister Ebrard is meeting with U.S. officials in hopes of persuading them to discount tariffs on heavy truck parts.
China
PBoC fix: 7.0968 vs exp. 7.1186 (Prev. 7.0995)
Shanghai Shenzhen: CSI 300 rose 0.26% to 4618.42
PBoC fixes yuan at its strongest level this year in anticipation of Fed rate cut.
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics
