December 9, 2025

USDCAD open: 1.3842, overnight range 1.3838-1.3858, close 1.3859

USDCAD rebounded modestly overnight because of a slight shift to mild risk aversion stemming from rising US Treasury yields. Traders are content to sit on the sidelines ahead of tomorrows Bank of Canada policy meeting which will see rates left unchanged.

The Reserve Bank of Australia’s monetary policy statement today is probably a pretty good preview of tomorrow’s BoC monetary policy statement.

 ”The recent data suggest the risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures. Private demand is recovering. Labour market conditions still appear a little tight but further modest easing is expected. The Board therefore judged that it was appropriate to remain cautious, updating its view of the outlook as the data evolve.The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.”

WTI oil prices were softer and they traded in a 58.59-59.12 range.  The focus is on the upcoming Energy Information Administration (EIA) short term oil outlook. The International Energy Agency (IEA) has warned of a record glut in 2026 and traders are awaiting further input.

US Jobs Opening and Labour Turnover (JOLTS) is the only excitement in what is likely to be another quiet trading session.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish below 1.3910 and looking for another test of support in the 1.3810 area to extend losses to 1.3760.  A break above 1.3820 suggests further a retest of  resistance at 1.3980.

The medium-term technicals are unchanged.  They are bearish supported by the breach of the 100 and 200-day moving averages following the failure to take out resistance in the 1.4070 zone. Only a rebound above 1.3920 would negate the downside pressure.

For today, USDCAD support is at 1.3810 and 1.3790. Resistance is at 1.3880 and 1.3920
Todays Range 1.3810-1.3890.

The Calm Before the Bore

The FOMC meeting is tomorrow and the odds of a rate cut are 87%. At issue is how the news is delivered. Will Powell continue to warn of upside risks to inflation? If he does, will anyone care because after tomorrow’s meeting, he only has three more meetings as Chair left. The Summary of Economic Projections will be of some interest, but with Atlanta Fed Bostic retiring in February, his projections are of little use. The same holds true for Powell if he opts to leave the Fed when his term as Chair is finished. He could stay on just to annoy Trump.

Taking Stock

In Asia, Japan’s Topix closed flat, Australia’s ASX 200 lost 0.45% due to a hawkish RBA outlook, and Hong Kong’s Hang Seng fell 1.29% on risk-off sentiment and higher US Treasury yields.

As of 5:00 am PT, in Europe, the German DAX is up 0.25%, the UK FTSE 100 is flat while the French CAC-40 is down 0.65.%, S&P 500 futures are flat. The U.S. Dollar Index (DXY) is 99.11, the U.S. 10-year Treasury yield is 4.168%, and gold (XAUUSD) is 4206.72.

EURUSD

EURUSD is spinning its wheels in a 1.1633-1.1658 range. The bounce in US Treasury yields has put a cap on the upside for now. Traders were unimpressed with German trade data. Exports rose 0.1% in October (forecast -0.2%, September 1.5%).

GBPUSD

GBPUSD is in the middle of its 1.3318-1.3357 range as it continues to consolidate its post-Autumn budget gains. The GBPUSD uptrend is intact while prices are above 1.3250 and looking for a break above 1.3390 to target 1.3490.

USDJPY

USDJPY bounced in a 155.74-156.43 range with traders there distracted by a major earthquake and tsunami warning. Prices were bid on the back of firmer US Treasury yields.

AUDUSD

AUDUSD dropped and popped in the wake of the RBA decision to leave rates unchanged at 3.6%, which was widely expected. Governor Michele Bullock’s post-meeting comments were hawkish. She said that no rate cuts were on the horizon and that the risks were tilted to the topside.

USDMXN

USDMXN traded with a negative bias in an 18.2402-18.2798 range and is looking for further losses to 18.2000. President Trump took to Truth Social to express his outrage over what he says is Mexico violating our Comprehensive Water Treaty. If Trump’s claims are accurate, it means only the US is allowed to violate a treaty.

China

PBoC Fix: 7.0773 vs exp. 7.0748 (Prev. 7.0764)

Shanghai Shenzhen CSI 300 fell 0.51% to 4598.22

Trump authorizes Nvidia H200 chip sales to China-for a 25% cut of the profits, which he described as improving National Security. Tony Soprano used to let restaurants serve the public for a similar fee, but the Federal government called that extortion.

FX High, Low, Open

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