October 22, 2025

USDCAD open: 1.4012, overnight range 1.3994-1.4024, close, 1.4023

USDCAD dropped in concert with US dollar selling pressure vs the majors. Yesterday’s Canadian inflation report was a touch hotter than expected which would normally suggest that the BoC would be reluctant to lower interest rates. But these are not normal times. Inflation is close enough to the BoC target to be ignored, especially in light of ongoing risks to economic growth.  The economy is already treading water and the US tariffs are exacerbating the problem.

The media is talking about a Canada/US trade deal which the Globe and Mail reports, could be ready to be signed at the upcoming Asia-Pacific Summitt. Prime Minister Carney warned “I wouldn’t overplay it.” That is probably good advice as other reports note that autos and lumber are not included.

WTI oil is hanging on to yesterdays gains in a 57.34-58.49 band. Prices are supported by optimism that an India/US trade deal would curb India’s purchases of Russian crude.

The US and Canadian economic calendars are empty.

USDCAD Technical Outlook

The intraday USDCAD technicals are slightly bearish inside a consolidation range of 1.3980-1.4080 and looking for a test of support in the 1.3960-80 area.

The medium-term technicals are bullish above the 200 day moving average at 1.3963 which is guarded by additional support in the 1.3980. A decisive break above 1.4080 targets 1.4140 then 1.4295.

For today, USDCAD support is at 1.4000 and 1.3980. Resistance is at 1.4050 and 1.4080
Today’s Range: 1.4000-1.4080,

Ho-Hum Wednesday

There isn’t a whole lot of anything to drive FX markets today unless there is a spillover effect from one of the many U.S. quarterly earnings reports. Tesla’s (TSLA: NASDAQ) results are released after the stock market closes.

President Trump reportedly declined to meet with Democrat leaders to discuss reopening the government. Meanwhile, U.S. soybean farmers are left holding the bag (of beans), noting that there have not been any new soybean sales to China.

Taking Stock

Asian equity indexes closed on a mixed note. Australia’s ASX 200 fell 0.71%, Hong Kong’s Hang Seng dropped 0.94%, but Japan’s Topix gained 0.52%.

As of 5:15 AM, European indexes are mixed. The French CAC-40 is down 0.29%, the U.K. FTSE 100 is up 0.93%, and Germany’s DAX is down 0.09%. S&P 500 futures are flat, while the U.S. Dollar Index (DXY) has risen to 99.07. The U.S. 10-year Treasury yield is 3.95%, and gold (XAUUSD) trades at 4048.45

EURUSD

EURUSD is at the bottom of its 1.1587–1.1616 range on the back of broad-based U.S. dollar strength. Next week’s ECB monetary policy meeting is shaping up to be a non-event. French political drama has calmed down for now, and the recent economic data has been mixed. That leaves EURUSD direction at the mercy of the U.S. dollar, and with Fed rate cuts on the docket, this latest dollar rally may be coming to an end.

GBPUSD

GBPUSD dropped to 1.3312 from 1.3387 after a series of economic reports showed inflation rising less than expected. Headline CPI rose 3.8% y/y in September (forecast 4.0%) while Core CPI rose 3.5% y/y (forecast 3.6%). The Retail Price Index fell 0.4% compared to an increase of 0.4% in August. The data increased the odds of a Bank of England rate cut in December but not in November. That’s because the Autumn Budget is scheduled after the November 6 BoE meeting, and policymakers are likely to wait for its fiscal details.

USDJPY

USDJPY traded sideways in a 151.49–151.96 range as it consolidated Tuesday’s gains. Prime Minister Takaichi is reportedly planning to announce a $92 billion stimulus plan in the coming days. Former Bank of Japan Governor Haruhiko Kuroda is not a Trump fan; he said that the U.S. is “destroying the global economic order.”

AUDUSD

AUDUSD chopped about in a 0.6483–0.6513 range, rallying in Asia then falling into the NY open. Earlier euphoria from news of a U.S. and Australia rare earths deal faded as it is meaningless in the short term. The project financing of just $1.0 billion won’t be finalized for about six months. It’s another of Trump’s “framework deals”—all bread, no sandwich.

USDMXN

USDMXN traded with a slight negative bias in a 18.3978-18.4425 band. The Mexican economy continues to struggle due to Trumps tariffs. September GDP fell 0.6% y/y. The service sector rose 0.8% while industrial activity declined 3%. Traders are looking forward to Thursday’s inflation report.

China

PBoC fix: 7.0954 vs exp. 7.1225 (Prev. 7.0930)

Shanghai Shenzhen: CSI 300 fell 0.33% to 4592.57

Goldman Sachs analysts are forecasting that Chinese stocks may rise close to 30% by the end of 2026. The gains would be on the back of recent policy initiatives re-igniting earnings growth and a reallocation of global assets.

Trump reiterated his threat of 155% tariffs on china beginning November 14.

FX High, Low, Open

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