August 28, 2025

USDCAD open 1.3772, overnight range 1.3753-1.3792, close 1.3794

USDCAD dropped in concert with the other major G-10 currencies due to falling US Treasury yields. The 10-year Treasury yield dropped from a peak of 4.287% to a low of 4.21% overnight but have ticked up to 4.23% in NY. The Trump drama surrounding the Fed and Powell’s dovish pivot are weighing on USDCAD.

WTI oil drifted higher in a 63.51-64.02 range with prices getting a bit of support from a larger than expected decline in the EIA’s weekly crude inventory data which fell by 2.392 million barrels compared to the forecast for a 2.0 million drop. In addition, prices were underpinned after Britain, France and Germany talked about reviving Iran sanctions.

Canada’s current account deficit widened toa record $21.2 billion from -$1.32 billion. StatsCanada said “the rapid widening of the trade in goods deficit and was largely due to weaker exports.”

USDCAD trading may get choppy heading into the 10:00 am expiry window when $980 million of strikes roll off.

USDCAD Technical Outlook:

The intraday technicals flipped to bearish with the move below 1.3820 yesterday and are now looking for a break below 1.3720 to extend losses to 1.3650.

The medium-term picture is bearish below 1.3840 which guards the longer-term downtrend from the 1.3920-50 range and targets further losses to 1.3710. A break of that levels puts 1.3550 in play.

For today, USDCAD support is 1.3710 and 1.3680. Resistance is 1.3810 and 1.3840. Today’s Range: 1.3710-1.3810.

Saying “So Long” to Summer

The final long weekend of the summer is here and traders are struggling to find motivation despite a rash of economic reports today and Friday.

US GDP was stronger than expected in Q2 rising 3.3% compared to the forecast of 3.1% and the previous result of 3.0%. Initial jobless claims rose less than expected (actual 229,000, forecast 230,000 and last weeks 234,000. PCE prices rose 2.0% q/q a tick better than the 2.1% expected.

Does it really matter? Probably not today or tomorrow, but data will matter more in the run-up to the September FOMC meeting.

Taking Stock

Asian equity traders were not put off by the Nvidia quarterly earnings and markets closed higher. Japan’s Topix rose 0.65% and Australia’s ASX200 gained 0.22%. Hong Kong’s Hang Seng closed with a loss of 0.81%.

As of 8:40 am EDT, the French CAC-40 Index has gained 0.35%, the UK FTSE 100 is down 0.30%, and the German DAX and S&P 500 futures are flat. The US 10-year Treasury yield is at 4.241%. Gold (XAUUSD) is 3402.68, and the US Dollar Index (DXY) is 97.94.

EURUSD

EURUSD is at the top of its 1.1629-1.1660 range. Gains are hampered by headwinds from France where the government is expected to lose a no-confidence vote on September 8 due to a hugely unpopular austerity budget. Gains were also slowed by slightly disappointing Economic Services, Sentiment, and Industrial confidence indicators, although Consumer confidence was unchanged.

GBPUSD

GBPUSD traded higher in a 1.3484-1.3519 range supported by the generally soft US dollar with lingering support from expectations for a slower pace of BoE rate cuts. GBPUSD short-term technicals are bullish while prices are above 1.3420 and are looking for a decisive break above 1.3540, to snap the May downtrend and target 1.3690.

USDJPY

USDJPY traded in a narrow 147.00-147.49 range in a quiet session with selling pressure stemming from mildly hawkish comments from BoJ Board member Junko Nakagawa. In addition, broad US dollar weakness weighed on prices. Japan’s trade negotiator Ryosei Akazawa cancelled his trip to the US at the last minute citing “more clarity needed on Japan’s $550 billion investment.”

AUDUSD

AUDUSD managed to trade higher, rising in a 0.6503-0.6524 band, supported by a generally but mildly weak US dollar and the PBoC’s efforts in allowing the Chinese yuan to appreciate.

USDMXN

USDMXN traded sideways in a 18.6302-18.6735 band ahead of today’s domestic employment numbers and caution ahead of the US data. Mexico, in another blatant effort to curry favour with the Trump administration, is planning to hike tariffs on Chinese imports, according to Bloomberg.

USDCNY

PBoC fix: 7.1063 vs exp. 7.1479 (Prev. 7.1108)

Shanghai Shenzhen CSI 300 rose 1.77% to 4463.78

FX High, Low, Open

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