November 4, 2026
USDCAD open (6:00 am): 1.3960, overnight range 1.3930-1.4015, close 1.4011
USDCAD dropped in concert with the major currencies, alongside the US Republican party’s hopes of keeping control of the Senate and the House. American voters took Trump’s recommendation to “vote like I’m on the ballot,” and they did. Democrats won a massive victory.
It’s a good thing in that Trump gets leashed, but it was Democrats that promoted wack-a-doodle polices like defund the police and transitioning the US to a renewable energy economy without thought to costs, as well as a host of others.
Bank of Canada Governor Tiff Macklem’s appearance before the House of Commons Finance Committee on Tuesday offered little new insight into monetary policy, largely repeating the rationale behind last week’s 25 bp rate increase to 2.50%. The more revealing details were in the original Monetary Policy Report (MPR), which explained why Governing Council chose to hike rather than hold.
WTI dropped to $94.63 from $97.11 range after shrugging off an API report of that crude inventories fell by 5.3 million barrels last week. Prices were also pressured after Trump said there is no immediate plan to strike Iran.
Canada’s September merchandise trade surplus rose to $5.35 billion from $4.95 billion in August.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while below 1.4140 while prices remain below 1.4020. Yesterday’s bounce to 1.4015 was rejected overnight, and prices slid back to 1.3941, the floor of the 1.3940-1.4020 consolidation range that has held for the past week.
Longer term, the technicals are unchanged. USDCAD is in a downtrend, confirmed by the breaks below 1.4130 and then 1.4000, and it remains below the 100-day moving average at 1.4046. A decisive break below 1.3930 targets the May uptrend line, which comes into play at 1.3850.
For today, USDCAD support is 1.3930 and 1.3890. Resistance is 1.3980 and 1.4020.
FX Heat Map
FX open high low 6:00 am
No Repeat of January 6, 2020
MAGA will not be rioting. The US Capitol is safe after Trump said he would respect the outcome of the mid-term elections. But he did remind newly empowered Democrats: “I have a veto, and a veto is a powerful thing.”
Financial markets took the news in stride, mostly because the results were not complete. Bond traders left 2- and 10-year yields relatively unchanged, gold prices soared over $110.00 and the US dollar index gapped lower, falling from 101.91 to 101.28.
Reality Check
ADP employment showed a gain of 86,000 jobs in October (forecast 69,000) and little changed from September’s result. The US September trade balance is deficit of about $105 billion (previous -$105.6 billion). Still to come, the October ISM services index which is forecast at 54.8 (previous 54.9).
Taking Stock
Asian equity markets closed with Hong Kong’s Hang Seng index rising 1.67% while Australia’s ASX 200 lost 0.59%, and Japan’s Topix dropped 0.89%.
As of 5:50 am PT, European bourses are in rally mode, led by a 2.10% gain in the French CAC-40. The German DAX is up 1.93% while the UK FTSE 100 has climbed 1.80%. S&P 500 futures are up 1.12%. The US 10-year yield is 4.92%, the DXY is 101.28 and Gold (XAUUSD) is at 4,043.55..
EURUSD | Range 1.1187-1.1273
EURUSD is near the top of its overnight range thanks to widespread US dollar selling pressure. Eurozone October flash HICP came in at 4.0% y/y, as expected but higher than the 3.8% result in September. The inflation increase raised the odds that the ECB will hike rates in December. Eurozone Composite PMI Output Index was 51.7 (September 53.1) while Services PMI Business Activity Index was 51.4 (September 53.0). S&P Global Chief Business Economist Chris Williamson wrote, “October’s PMI survey data indicate that the eurozone economy is growing at a respectable though unexciting 0.3% rate at the start of the fourth quarter.”
GBPUSD | Range 1.3407-1.3503
GBPUSD caught a bid, along with the rest of the G-7 major currencies, due to the US mid-term election results. Prices may struggle to extend the rally as the Bank of England monetary policy meeting is tomorrow. UK October Services PMI accelerated to an eight-month high of 52.8 (up from 52.1 in September), which S&P Economist Tim Moore said “is due to a combination of faster output growth and stronger price pressures across the UK service economy.”
USDJPY | Range 157.40-158.76
USDJPY rallied but ran into safe-haven demand due to ongoing tech stock worries and from intervention threats by government officials. Chief Cabinet Secretary Minoru Kihara publicly stated today that the administration is watching market movements with a “high sense of urgency.”
AUDUSD | Range 0.6954-0.7023
AUDUSD rallied sharply on the back of widespread US dollar weakness, which helped to take the sting out of Tuesday’s dovish rate hike by the RBA.
USDMXN | Range 18.5756-18.8701
USDMXN has dropped to its session low on news that US Democrats won control of the House and Senate 18.6255. In addition, Banxico’s survey of analysts sees the policy rate holding at 6.50% through 2027, which keeps the peso’s carry trade intact for now.
CHINA
PBoC Fix 6.7180 vs exp. 6.6811 (prev. 6.7150
Shanghai Shenzhen CSI 300 rose 2.31% to 4,101.34
China RatingDog October Services PMI 50.8 (forecast 51.5, September. 51.6
Sources: Investing.com, Newsquawk, Associated Press, FXStreet, investingLive, Tradingpedia, Business Recorder, TradingView
