September 17, 2026
USDCAD open: 1.3995, overnight range 1.3981-1.4002, close 1.3987
USDCAD spiked after the Fed hiked rates by 25 bps and indicated that more increases may be in the pipeline. The rate hike was expected and fully priced in, but the hawkish tone was not.
Canada/US 2 and 10-year differentials widened on the news but have since recovered which re-enforced resistance in the 1.4000-1.4010 area.
Prime Minister Mark Carney is addressing the EU parliament and said that a deeper partnership between the EU and Canada was necessary as a hedge against great powers encroaching on the sovereignty of smaller states.
“Together, Canada and the European Union can anchor our ground to hold our values while forming a protective canopy under which our citizens can thrive. This is about sovereignty. Our ability to live as we wish. It is about the freedoms we must fight for every day. Sovereignty requires resilience — the ability to withstand shocks. We are not fair-weather allies. We do not pursue zero-sum deals.”
WTI oil prices are trading in a $100.40-$102.45 range after touching 106.75 yesterday. The retreat stems from reports that Saudi Arabia is pushing extra crude cargos through Oman. Its not a pipeline, it is a series of smaller “shuttle” tankers delivering crude to the Omani side of the Strait then conduct ship-to-ship transfers.
Canada data Industrial Product Price rose 1.3% m/m in August (forecast 0, July 0.3%) and Raw Material Price index jumped 3.1% (forecast 0.7%, July -2.1%). for August.
U.S. weekly jobless claims fell 10,000 to 196,000, building permits fell 2.7% (July -4.3%), housing starts fell 2.6% (July -9.0%) and the Philadelphia Fed Manufacturing index fell from 47.4 to 37.8 in September.
USDCAD Technicals
The intraday USDCAD technicals are bullish above 1.3970. However the RSI is deeply overbought on both the daily and 4-hour charts. A break above 1.4010 opens the door to 1.4050, while a move back below 1.3970 suggests a retest of 1.3910.
Longer term, the 1.3760-1.4010 range that has contained price action since the middle of July remains intact while prices are below the 1.4010 area. A topside break targets 1.4130 and then 1.4250, the July high.
For today, support is 1.3970 and 1.3910. Resistance is 1.4010 and 1.4050.
Today’s range 1.3950-1.4030.
FX Heat Map
FX open high low 6:00 am
Fatal Attraction
The EU is considering granting Canada “associate member” status. It is an novel idea designed to create a new tech alliance and expand trade of energy, critical minerals and batteries with a reliable, trustworthy, partner within a rules-based economy. Trump reacted to the news in typical fashion-threatening tariffs. The “Bunny Boiler-in-Chief said, “If they do that, if I think it’s at all a hostile act, I will put very serious tariffs or stop trading with Europe on many things.”
Hawks Dine on Doves
The feathers were flying during the FOMC meeting and when it was all said and done, there wasn’t a dove to be found. The Fed hiked rates to 4.0% and Chair Warsh justified the action by describing the economy as strong, financial conditions as loose and inflation progress as stalled. The odds for a follow-up hike before year end are over 50% because Warsh said “I would be hard‑pressed to describe broad financial conditions as restrictive.”
Taking Stock
Wall Street closed deep in the red following the FOMC meeting, but Asia equity indexes closed mixed to higher. Japan’s Topix rose 0.80%, Australia’s ASX 200 gained 0.41% while the Hang Seng lost 0.44%.
As of 7:05 AM, European bourses have shrugged of the Fed hike and are higher. The German Dax has gained 0.45%, the French CAC 40 is up 0.23% and the UK FTSE 100, has risen 0.22%. S&P 500 futures are up 0.87%, the 10-year Treasury yield is 4.971%, the DXY is 100.18 and gold is $4,332.21.
EURUSD | Range 1.1456-1.1484
EURUSD got clocked following the FOMC decision despite a rate hike being fully priced in, because the move wasn’t “one-and-done” but “one-and-then-another, maybe.” The hawkish Fed combined with sticky-to-higher oil prices drove EURUSD through key support in the 1.1500-10 area and it is in a downtrend while prices are below 1.1550. Eurozone HICP inflation rose 0.3% m/m in August a tick below the 0.4% expected and seen in July.
GBPUSD | Range 1.3369-1.3407
GBPUSD is steady after the Bank of England left its benchmark rate unchanged at 3.75% which was expected. It wasn’t a unanimous decision, and it wasn’t expected to be. Three members, Megan Greene, Catherine Mann and Huw Pill wanted a 25 bp hike due to high energy and food prices.
USDJPY | Range 155.53-156.32
USDJPY spiked to 156.41 in the wake of the FOMC decision then consolidated the gains overnight. The Bank of Japan meeting is tomorrow and while a 25 bp rate hike to 1.25% is expected, the BoJ may need to match the Fed’s hawkish tone to avoid another USDJPY rally. Prime Minister Sane Takaichi shuffled her cabinet and her Economy Minister said that the country would not engage in “wanton fiscal expansion.”
AUDUSD | Range 0.7120-0.7140
AUDUSD is recouping its post-FOMC losses supported by increased odds for an RBA rate hike to 4.60% on September 29. The IMF is calling for the Australian government to cut spending and downgraded its 2027 economic growth forecast to 1.6% from 1.7%.
USDMXN | Range 17.1084-17.1613
USDMXN is consolidating its post-FOMC gains but the downtrend from June remains intact while prices are below 17.3500. The prospect of additional Fed rate hikes is limiting the downside.
CHINA
- PBoC Fix 6.7580 vs Exp. 6.7241 (prev. 6.7628).
- Shanghai Shenzhen CSI 300 fell 0.45% to 4,460.16
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
