October 21, 2025

USDCAD open: 1.4054, overnight range 1.4014-1.4066, close, 1.4040

USDCAD rose due to general US dollar strength in an otherwise uneventful market overnight. Trading enthusiasm has waned on the ongoing US government shutdown, a lack of actionable economic data and shifting trade talk between Beijing and Washington. The long-delayed US October inflation data which is expected on Friday and the FOMC meeting on October 29 are also encouraging traders to stay on the sidelines.

Canada’s September inflation rose 2.4% y/y (forecast 2.3%, August 1.9%) and 0.1% m/m compared to -0.1% m/m in August. The news knocked USDCAD down to 1.4014 from 1.4040. The news could force the BoC to delay a rate cut next week.

WTI oil prices chopped around in a 56.61-57.62 range, little changed from yesterday and traders are awaiting fresh catalysts.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish above 1.4005 and looking for a break above 1.4080 to target 1.4120.  A break below 1.4005 suggests further losses to1.3970

The medium-term technicals are unchanged.  They are bullish above 1.3990 and looking to break above 1.4080 to extend gains to 1.4120 then 1.4040.

For today, USDCAD support is at 1.4010 and 1.3970. Resistance is at 1.4070 and 1.4110.
Today’s Range: 1.4010-1.4110.

Tuesday’s Glass is Half-Full

Russia is still trying—and failing—to take over Ukraine as Trump’s Putin-appeasement strategy gets rebuffed by Kyiv. The tariff tit-for-tat between China and the U.S. continues, but both sides are gearing up for a Xi Jinping–Trump meeting later this month, where analysts expect a “framework” for a deal to be announced. Meanwhile, the U.S. government shutdown drags on, and gold prices slipped on profit-taking.

The U.S. dollar catches a bid

The greenback climbed to a near one-week high around 98.70, buoyed by optimism surrounding Trump’s upcoming meeting with China’s Xi Jinping in South Korea. Hopes for a thaw in tensions lent the dollar some renewed strength.

Equities on watch

It’s a busy day for equity markets, with quarterly earnings from Netflix, Coca-Cola, and General Motors among the highlights. Traders are also waiting for Friday’s U.S. inflation data, which could set the tone for the next round of Fed policy bets.

Taking Stock

Asian equity traders followed Wall Street’s lead and bought stocks. Australia’s ASX 200 rose 0.70%, Hong Kong’s Hang Seng gained 0.83%, and Japan’s Topix was flat.

As of 5:40 AM PDT, European indexes are higher led by the French CAC-40 rising 0.40%, the UK FTSE 100 gaining 0.29% and Germany’s DAX rising 0.18%.  S&P 500 futures are flat while the U.S. Dollar Index (DXY) has risen to 98.93.  The U.S. 10-year Treasury yield is 3.971%, and gold (XAUUSD) trades at 4,216.87

EURUSD

EURUSD traded in a 1.1611–1.1656 range and is sitting near the session low in New York. Trading is uninspired ahead of Friday’s U.S. inflation data and next week’s ECB meeting. Technicals remain bearish, with a week-old downtrend channel on the hourly chart guiding prices lower in a 1.1600–1.1650 band.

GBPUSD

GBPUSD drifted lower in a 1.3366–1.3417 range. With no major data, traders focused on the latest UK borrowing figures, which economists at Capital Economics called a “dismal” backdrop for November’s budget.

USDJPY

USDJPY rallied steadily, rising from 150.47 in Asia to 151.96 in early New York trading. Gains were fueled by news that Sanae Takaichi will be inaugurated as Japan’s first female Prime Minister today. She’s expected to favor lower interest rates and higher government spending.

AUDUSD

AUDUSD traded lower in a 0.6477–0.6525 range due to broad-based U.S. dollar demand. News that the U.S. and Australia signed a rare-earth minerals deal failed to lift the currency.

USDMXN

USDMXN traded in a 18.3834-18.4887 range as prices tracked broad US dollar movements and the state of China/US trade talks.

China

PBoC fix: 7.0930 vs exp. 7.1219 (Prev. 7.0973)

Shanghai Shenzhen: CSI 300 rose 1.53% to 4607.87

China GDP growth forecasts are being revised upwards by several banks including Goldman Sachs (new 4.9%, previous 4.8%), Standard chartered (4.9% from 4.8%) and Barclays Bank (4.8% from 4.5%)

China purchased zero soybeans from the US in September, but Brazilian soybean imports surged nearly 30%. Total imports remained at elevated levels. (12.8 million tons)

China exports of rare earth magnets to US fall 29% while imports of Russian oil increase.

FX High, Low, Open

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