USD / CAD - Canadian dollar adrift
- Data void leaves markets in park
- Trump increases pressure on Fed
- US dollar inching higher across the board.
USDCAD open 1.3855, overnight range 1.3828-1.3857, close 1.3840, WTI 63.22, Gold 3378.10
The Canadian dollar drifted lower in an uninspired trading session, hampered by thinner-than-usual markets due to the end of summer vacations. Furthermore, slumping US Treasury yields served to narrow CAD/US 10-year spreads, which is also weighing on the Loonie.
There are not any actionable Canadian or US economic reports today (but plenty Thursday and Friday), which suggests a very quiet trading day ahead.
WTI slipped within a 62.98-63.45 band even after Trump’s 50% tariff on India, with Reuters reporting expectations for a large inventory build through Q4 and into 2026 keeping a lid on prices.
Trump’s push to reshape the Fed is gathering steam. Powell flipped to a dovish stance after months of insults, and Trump claims to have fired Governor Lisa Cook. She disputes it and intends to sue, but the effect is the same—the Fed is now looking less like an independent institution and more like a partisan club.
Asian equities were mixed. Japan’s Topix ended flat, Australia’s ASX 200 gained 0.28%, while Hong Kong’s Hang Seng slid 1.27% on profit-taking. In Europe, the CAC-40 is up 0.35%, the FTSE 100 is flat, and the DAX is down 0.20%. S&P 500 futures are steady as traders wait for Nvidia earnings. The US 10-year yield sits at 4.273%, gold is at 3375.26, and the DXY is 98.66.
EURUSD drifted in a 1.1578-1.1651 band, pressured by French political noise in thin summer trading. The EU plans to scrap all tariffs on US goods by week’s end, which may only fuel Trump’s appetite for retaliatory tariffs on countries with digital taxes.
GBPUSD traded between 1.3430 and 1.3486, under broad dollar pressure. That seems odd given most analysts argue that Trump undermining Fed independence is dollar negative, but the market doesn’t care—yet. Intraday bias is bearish below 1.3480 with scope for a dip toward 1.3410.
USDJPY moved sideways in a 147.28-148.08 range, caught between dollar strength and weaker Treasury yields, with chatter about a potential BoJ rate hike swirling in the background.
AUDUSD consolidated between 0.6465 and 0.6505, sliding to session lows in New York. Stronger-than-expected inflation (2.8% vs 2.3% forecast, 1.9% in June) was shrugged off as electricity prices drove the gains. US dollar strength and Trump’s 200% tariff threat on China kept the Aussie under pressure.
