September 22, 2025
USDCAD open 1.3810, overnight range 1.3779-1.3812, close, 1.3781
USDCAD climbed steadily overnight due to general US dollar strength vs the majors. CAD/US 10-year yield spreads have widened from -81.2 on September 4 to -92.7 today, which is where they were at the end of July when the Fed and the BoC left rates unchanged.
BoC Governor is in Saskatchewan on Tuesday and will speak about “Global Trade and Capital flows. More importantly, Canada GDP data is due Friday, and it is expected to underscore the weakness of the domestic economy.
WTI oil traded lower, falling from 63.00 to 61.91 in early NY trading with traders ignoring ongoing middle east tensions
Canada Raw Materials index fell 0.6% in August (forecast 1.2%, July 0.3% ) and Industrial Product Price rose 0.5% m/m (forecast 0.9%, July 0.7%)
USDCAD Technical Outlook:
The intraday technicals are trading with a slight bid but consolidating in a 1.3770-1.3850 range. A topside break targets 1.3880 while a move below 1.3770 suggests a test of support at 1.3730.
The medium-term technicals are unchanged. The break above the 100-day moving average at 1.3762 puts the 200-day moving average at 1.4002 in play. However, the medium-term bias is negative while trading below 1.3960 which is guarded by 1.3950, the 61.8% Fibonacci level of September 2024-February 2025 range.
For today, USDCAD support is 1.3770 and 1.3740. Resistance is 1.3820 and 1.3850. Today’s Range: 1.3770-1.3840.
Making America Dumb Again
President Trump has decided that the solution to protecting American jobs is a profoundly stupid and economically self-defeating plan. He is planning to charge $100,000 for the H-1 visa (used to employ temporary, highly educated, highly skilled foreign workers) that fill a massive gap in the hiring needs of American Tech companies in particular. He thinks the likes of Google, Amazon, Apple etc. can fill the roles from the unskilled, uneducated American labour pool.
Talk, talk ‘til you Drop
Another hot air front will gust through markets this week. Four FOMC members, including NY Fed President John Williams and new temporary Governor Miran, speak today, while Fed Chair Jerome Powell headlines Tuesday’s cast with Michelle Bowman and Raphael Bostic on tap as well.
Taking Stock
Asian equity indexes finished with gains. Japan’s Topix rose 0.99% and Australia’s ASX 200 rose 0.32%. The Hong Kong Hang Seng fell by 0.76% ahead of Super Typhoon Ragasa which is expected to hit the city on Wednesday.
As of 8:30 am EDT, European equities are down except for the UK FTSE 100 which is up 0.16%. The German DAX has dropped 0.52%, the French CAC-40 lost 0.15% and in America, S&P 500 futures are down by 0.33%. The US dollar index (DXY) is at the bottom of its 97.41-97.82 range, Gold (XAUUSD) is 3717.43 and the US 10-year Treasury yield sits at 4.133%.
EURUSD
EURUSD traded in a 1.1726-1.1787 range with the bottom seen in Asia. Prices climbed steadily into the NY open without a clear catalyst. Eurozone PPI reports are due on Tuesday. The longer-term EURUSD technicals suggest EURUSD is vulnerable to the downside on a break below the 1.1720 area.
GBPUSD
GBPUSD is near the top of its 1.3453-1.3506 overnight range as it consolidates last week’s losses. Ongoing concerns about the UK’s rising debt will limit gains. Traders are awaiting remarks from Bank of England Governor Andrew Bailey and Chief Economist Huw Pill today. GBPUSD technicals suggest more range trading in a 1.3330-1.3670 band.
USDJPY
USDJPY traded sideways in a 147.75-148.38 range with prices supported by the jump in US 10-year Treasury yields from 3.99% last week to 4.149% today. Friday, the BoJ announced plans to slowly reduce its ETF and REIT holdings but at the pace announced, it would take over 100 years to reduce the balance to zero.
AUDUSD
AUDUSD traded firmer in a 0.6575-0.6601 range supported by broad-based, but mild, US dollar strength. The currency pair found its bottom after RBA Governor Michele Bullock sounded moderately hawkish while testifying before parliament, noting that inflation has fallen inside the RBA target.
USDMXN
USDMXN traded uneventfully in a 18.3825-18.4320 range. Prices are supported by the downgraded outlook for US interest rates following last weeks FOMC meeting. Banxico meets on Thursday and is expected to announce a 25 bp rate cut to 7.75%.
USDCNY
PBoC fix: 7.1106 vs exp. 7.1159 (Prev. 7.1128)
Shanghai Shenzhen CSI 300 rose 0.46% to 4522.61.
PBoC leaves rates its 1-year and 5-year Loan Prime Rate (LPR) unchanged as expected.
Trump/Xi call lasted nearly 2 hours but few details were released. Trump described the talks as “very productive” While Chinese authorities said they were constructive and positive. Trump said he plans to meet with Xi on the sidelines at the Asia-Pacific Economic Cooperation summit, in South Korea Oct 31-November 1
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics
