October 27, 2025
USDCAD open: 1.3974 overnight range 1.3970-1.4011, close, 1.3997
Trump slapped another 10% tariff on Canada after his feeling were hurt by Doug Ford’s ad that showed even former President Ronald Reagan would think Trump was a muppet for his fixation on tariffs. That news had zero impact on USDCAD trading-for now. Longer term, Trump’s animosity to Canadian trade will drive the country into a deep recession and sink the currency.
WTI oil dropped to 60.18 from 62.17 as news of the China and US trade framework shifted the focus to the anticipated global supply surplus in the coming months. The latest US sanctions on Russian oil companies, Lukoil and Rosneft are the wild card. If effective, they should put a floor under prices.
USDCAD Technical Outlook
The intraday USDCAD technicals flipped to bearish with the move below support at 1.4000 and are looking for a decisive break below 1.3960 to test support at 1.3930, then 1.3860. a break above 1.4010, negates the downtrend and targets 1.4070.
The medium-term technicals are bullish while prices are above the 1.3750-60 zone, a level guarded by 61.8% (September-October range) Fibonacci support at 1.3818
For today, USDCAD support is at 1.3960 and 1.3930. Resistance is at 1.4010 and 1.4060
Today’s Range: 1.3960-1.4030
Hot-Air and Hype
President Trump’s Asian tour is getting all the attention. Trump has announced a flurry of trade deals with the likes of Cambodia, Vietnam, and Malaysia which are merely rehashed press releases of previously announced deals. The marque announcement was the “preliminary framework of a proposal” for a trade deal with China.
Trump also took time out of his busy schedule to tweet how wonderful he is, saying “After winning THREE Elections, BY A LOT, I am now getting the best Polling Numbers that I have ever received. People see how strong the Economy is, the Trillions of Dollars of Investment pouring into our Country, the Record Setting Strong Border (After years of millions of criminals pouring through it, totally unvetted and unchecked!), ending 8 wars in eight months.”
But it is the upcoming FOMC meeting on Wednesday that is moving markets. Friday’s inflation numbers were close enough to expectations to ensure a 25 bp rate cut followed by another 25 bp cut on December 10.
It’s a busy week for major central bank policy decisions with the Bank of Japan and the European Central Bank on tap Thursday.
Taking Stock
Asian equity traders embraced the trade announcements and outlook for another 50 bps of Fed rate cuts by year end and bought stocks. Japan’s Topix climbed 1.70%, Hong Kong’s Hang Seng gained 1.05%, and Australia’s ASX 200 rose 0.41%.
As of 4:45 AM PDT, European indexes are flitting around flat. The French CAC-40 and UK FTSE 100 indices are unchanged, and Germany’s DAX is down 0.12%. S&P 500 futures have climbed 0.81% while the U.S. Dollar Index (DXY) is 98.82. The U.S. 10-year Treasury yield rose to 4.029%. Gold (XAUUSD) trades at 4023.68
EURUSD
EURUSD traded sideways in a 1.1618-1.1648 range with prices underpinned by the improvement in risk sentiment. Trade deals and rate-cut hopes fuelled the gains, as did better-than-expected German Ifo Expectations and Business Climate readings for October. The report said, “Expectations are rising in all sectors — industry, construction, services. There is a glimmer of hope in industrial orders: the fall in orders seems to have stopped.” The ECB is expected to leave rates unchanged on Thursday.
GBPUSD
GBPUSD drifted inside Friday’s range, trading in a 1.3310-1.3347 band. The currency is resilient, which may encourage the BoE to leave interest rates unchanged. It is struggling to make headway due to domestic issues, particularly the looming U.K. budget due November 26 and the prospect of a Bank of England rate cut in December.
USDJPY
USDJPY bounced about in a 152.66-153.26 range and is in the middle of that band in early NY trading. Japanese Emperor Naruhito greeted Trump when he landed in Japan this morning. Japan’s Prime Minister Sanae Takaichi hopes to win favour with Trump by sharply increasing defence spending. She has been described as a “fiscal dove,” and her election has reduced the odds of a BoJ rate hike this week.
AUDUSD
AUDUSD gapped higher at the Asia open, rising from Friday’s close of 0.6513 to 0.6560 due to renewed positive risk optimism on the de-escalation of U.S. and China trade tensions. RBA Governor Michele Bullock noted that inflation and unemployment were “a little too high,” leading some analysts to believe it was a hint that interest rates will be left unchanged next week.
USDMXN
USDMXN was choppy in an 18.4003-18.4534 range. Prices are underpinned by last week’s softer-than-expected inflation data, which supports additional Banxico rate cuts. However, general U.S. dollar selling pressure from improved risk sentiment sparked by the U.S. and China trade news and the outlook for additional Fed rate cuts is limiting gains.
China
PBoC Fix: 7.0928 vs exp. 7.1192 (Prev. 7.0918).
Shanghai Shenzhen CSI 300 rose 1.19% to 4716.02.
Treasury Secretary Bessent said the November 1 tariff increase on Chinese exports has been averted, and China agreed to delay a new rare-earths licensing policy.
China and the U.S. reached a “preliminary framework of a proposal” for a trade deal. Trump said he is optimistic about a trade deal. Meanwhile, the United States Trade Representative office said they initiated an investigation of China’s implementation of the Phase 1 agreement.
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics
