November 12, 2026

USDCAD open (6:00 am): 1.4243, overnight range 1.4234-1.4265, close 1.4252

USDCAD is gnawing on resistance after climbing yesterday in thin trading conditions due to Remembrance Day and Veterans Day holidays but has retreated in NY trading.  The USDCAD rally from 1.3929 on November 4 to its session peak today is all due to Fed and BoC interest rate outlooks.

Analysts are reviewing the latest US inflation numbers and leaning towards the idea that the Fed’s decision to leave rates unchanged was a mistake, which suggests they will have to be more aggressive in the future.

On the other hand, the BoC’s decision to raise rates in the face of a slowing economy with weak employment looks questionable.  The Bank’s own inflation numbers say a hike was unnecessary and the minutes of the BoC’s deliberations confirm that view, as the Governing Council was split between holding and tightening.

The Canada-US two-year spread has widened 21 bps in the past week to -151.2 bps, with Canadian two-years at 3.251% and US two-years at 4.763%. That reverses most of the narrowing that followed the BoC hike in late October, which helps to explain the USDCAD rally.

WTI traded in an $85.21-87.51 range overnight and is at the top of the band in NY after Trump said the US does not need a deal with Iran. That comment suggests that the Wall Street Journal story that US Vice President JD Vance is weighing a face-to-face meeting with a senior Iranian official isn’t going to happen.. Prices are also undermined by reports that Saudi Arabian crude production rose 26% in October, a multi-year peak, and by the 9-million-barrel increase in US crude inventories last week.

Canadian building permits fell 4.1% in September (August 7.6%).  US initial jobless claims were 200,00 (forecast 195K and last week were 191k).

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while trading above the 4-hour mid-Bollinger Band at 1.4237, but the rally is losing steam just shy of the 1.4300 resistance area. USDCAD has posted five straight higher lows, from 1.3942 on November 5 to 1.4164 yesterday, so a pause or a shallow pullback is likely before another topside test.

Longer term, USDCAD is well above the 100-day moving average at 1.4044 and the 200-day at 1.3910, momentum indicators suggest that it is overbought, and 1.4300 has stopped every rally since June. A daily close above 1.4300 would break the range and open the way to the February 2025 tariff peak at 1.4795. Another rejection would leave USDCAD stuck in its 1.3450-1.4300 range, with the 38.2% Fibonacci retracement of the January to October rally at 1.3993 the first meaningful support on a deeper pullback.

For today, USDCAD support is 1.4230 and 1.4205. Resistance is 1.4280 and 1.4300.

Today’s Range 1.4210-1.4300

FX Heat Map

FX open high low 6:00 am

Put a Cork in It

Fed Chair Kevin Warsh is not a big fan of his colleagues’ penchant for incessant chatter about the outlook for interest rates. At his confirmation hearing in April, he told the Senate Banking Committee, “Truth-seeking is more important than repetition.” Last month he said, “I don’t believe in saying now what I might do at the meetings we have in the balance of the year. It’s a new chapter at the Fed, and we’re not in that business anymore.”

Policymakers have essentially ignored him, and Fed officials have been chattering up a storm, with a new barrage of comments from Beth Hammack, Austan Goolsbee, John Williams, Mary Daly and Michael Barr. The first two have already spoken this week, and their comments, along with those from Christopher Waller, have traders fearing two or more 25 bp rate hikes by March. It is Fed-speak, not data, driving US dollar gains this week.

Taking Stock

Asian equity indexes closed mixed. Japan’s Topix rose 0.20%, Hong Kong’s Hang Seng fell 1.26% and Australia’s ASX 200 finished flat.

As of 5:30 am PT, European bourses are well off earlier peaks. The German DAX and French CAC-40 are up 0.11%% compared to 0.71% a few hours ago while the UK FTSE 100 index is flat. S&P 500 futures are down 0.75%, the DXY is 102.95, the US 10-year yield rose to 5.048% from 4.998% earlier today and gold (XAUUSD) is at $3,902.93..

EURUSD | Range 1.1066-1.1100

EURUSD is clawing back its overnight losses, but the gains are merely a correction. The single currency is being driven lower by speculation that the Fed’s October 28 decision to leave rates unchanged was a mistake and now they have to make up lost ground. Meanwhile, markets believe that the expected ECB December rate hike will be its last for the foreseeable future. All of the above is occurring against the backdrop of ongoing concern about the fiscal health of France.

GBPUSD | Range 1.3250-1.3283

GBPUSD bounced off its overnight low after a slate of UK economic data reports met or beat expectations. Q3 GDP grew 0.7% and 1.9% from a year earlier, both as forecast. September industrial production rose 0.3% against expectations of a 0.3% decline, and manufacturing production rose 4.4% y/y in September (previous 2.5%).

USDJPY | Range 159.48-159.95

USDJPY traded sideways overnight and flirted with 160.00, a level that makes Japanese government officials unhappy. True to form, top currency diplomat Atsushi Mimura repeated his warning about excessive moves and reminded traders of this summer’s intervention. He was ignored. Japanese wholesale inflation jumped 7.1% y/y.

AUDUSD | Range 0.6815-0.6865

AUDUSD traded sideways and remains on the defensive due to the strong US dollar and Fed/RBA monetary policy divergence. The RBA is seen holding its cash rate at 4.85% well into next year, while the market prices more Fed hikes.

USDMXN | Range 18.5685-18.6466

USDMXN is trading sideways and choppily in its well-defined 18.37-18.87 range that has contained price action since the middle of September. It is an impressive performance, especially after Banxico surprised markets with a 25 bp rate cut to 6.25% last week.

CHINA

PBoC Fix   6.7174 vs exp. 6.6797 (prev. 6.7191)

Shanghai Shenzhen CSI 300 fell 0.78% to 4,043.93

Xi Jinping addressed an audience of top Chinese Communist Party  officials today and reminded them that resolving (annexing?) the Taiwan issue as an “unwavering historical mission” of the Chinese Communist Party.

Officials are finalizing arrangements for a Xi/Trump meeting at next weeks APEC Summit

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Sources: Investing.com, Newsquawk, Associated Press, FXStreet, investingLive, Tradingpedia, Business Recorder, TradingView