October 29, 2025

USDCAD open: 1.3944, overnight range 1.3924-1.3949, close, 1.3944

USDCAD dropped yesterday and extended the losses overnight.  The selling pressure stems from general US dollar weakness downgraded fears of a China/US trade war and position adjusting ahead of today’s FOMC meeting.

The Bank of Canada decision is almost a foregone conclusion-a 25 bp rate cut. The focus will be on the quarterly BoC quarterly Monetary Policy Report that is released ahead of Governor Tiff Macklem’s 10:30 am press conference. The BoC could push back against expectations for another rate cut in December although the lack of a US and Canada trade deal and the threat to the auto industry suggests the need for easier monetary policy.

Trump’s Asian tour is even more successful than Taylor Swifts’ Eras tour, if you can believe Trump’s words.  He tweeted that he was bringing back trillions of dollars to the USA and promised a great meeting with XI Jinping tomorrow, after an earlier tweet “For those that are asking, we didn’t come to South Korea to see Canada!”

WTI oil traded in a 59.71-60.53 range with gains limited by concerns that Opec will announce another production increase in the next few days that will go into effect on December 1. Bloomberg is reporting that a Russian tanker full of crude destined for India reversed course and is idling in the Baltic. The cargo came from Rosneft which Trump sanctioned last week.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish supported by yesterday’s breach of the 1.3960-70 support zone, waning bullish momentum, and looking for a test of the 1.3900-20 support zone. Intraday momentum indicators suggest USDCAD is becoming oversold, but not yet at or even close to oversold levels. A move below 1.3900 targets 1.3860, while a move above 1.3970 suggests further 1.3920-1.4020 consolidation.

The medium-term technicals are bearish below 1.3990 but suggest the move is merely downside consolidation while prices are above the 1.3880-1.3920 zone.

For today, USDCAD support is at 1.3920 and 1.3880. Resistance is at 1.3970 and 1.3990.
Today’s Range: 1.3890-1.3990.

FOMC Decision- Kind of a Non-Event

The FOMC decision is unlikely to be a market-moving event. A 25 bp rate cut is fully priced in and the government shutdown means policymakers do not have access to their usual economic metrics. Mr. Powell is unlikely to offer anything in the way of forward guidance, other than to reiterate his concerns about downside risks to the job market. Yesterday’s announcement by Amazon that it was cutting 14,000 jobs underscored the risk.

Taking Stock

Asian equity indexes closed mixed. Japan’s Topix fell 0.23%, Hong Kong’s Hang Seng dropped 0.33%, and Australia’s ASX 200 lost 0.96%.

As of 7:15 AM, European indexes are flat except for the UK FTSE 100 index, which is up 0.59%. S&P 500 futures are 0.27% higher while the U.S. Dollar Index (DXY) is 98.85. The U.S. 10-year Treasury yield is 3.994% and Gold (XAUUSD) is 4019.53.

EURUSD

EURUSD is choppy in a 1.1618-1.1661 range as it consolidates recent gains ahead of today’s FOMC meeting and the ECB rate decision tomorrow. The intraday EURUSD technicals are bullish above 1.1610 and looking for a move above 1.1670 to extend gains to 1.1750.

GBPUSD

GBPUSD is trading negatively in a 1.3198-1.3281 range with the government’s fiscal woes and fears of a £30 billion tax hike fueling losses. The BoE is widely expected to leave rates unchanged at 4.00% at next week’s meeting. A Reuters poll showed 53 out of 61 economists surveyed expected a “hold.”

USDJPY

USDJPY had a choppy overnight session trading in a 151.54-152.54 band. The currency pair is underpinned by expectations that the BoJ leaves rates unchanged tomorrow, but gains are capped by concerns policymakers may adopt a hawkish bias.

AUDUSD

AUDUSD rallied from 0.6578 to 0.6618 following a hotter-than-expected inflation report. The RBA’s Trimmed Mean CPI popped to 1.0% q/q (forecast 0.8%, previous 0.6%) and that put the final nail in the coffin for easier monetary policy.

USDMXN

USDMXN drifted higher in an 18.4226-18.4605 range. The topside is limited by U.S. dollar selling pressure against the majors ahead of today’s FOMC meeting and from lingering support after President Sheinbaum announced an extension to the U.S. and Mexican trade talks.

China

PBoC Fix: 7.0843 vs exp. 7.0962 (Prev. 7.0856)

Shanghai Shenzhen: CSI 300 rose 1.19% to 4747.84

The Xi Jinping/Trump meeting is tomorrow. Trump hints that he will lower tariffs if China cracks down on fentanyl production. Others expect that Trump and Xi will agree to lower port fees, and China buys 180,000 tons of U.S. soybeans ahead of Trump’s visit.

FX High, Low, Open

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