Canadian Dollar Update – Canadian dollar steady

• European equity markets trading defensively
• RBA leaves rates unchanged
• US dollar trading clawing back losses

USDCAD open: 1.3842, overnight range 1.3838-1.3858, close 1.3859, WTI 59.03, Gold 4204.41

The Canadian dollar gave back some of yesterdays gains in another quiet overnight session. The US dollar caught a bit of a bid due to mild risk-off sentiment after Treasury yields rose and stayed firm.  Traders are not interested in getting involved until after tomorrow’s Bank of Canada and FOMC policy meetings.

WTI oil prices drifted in a  58.59-59.12 range with traders awaiting 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.

The FOMC meeting lands tomorrow with markets pricing an 87 percent chance of a rate cut. The real question is the delivery. Powell may stick to his familiar script about upside inflation risks, but with only three meetings left in his term, traders may already be looking past him. The Summary of Economic Projections will get a glance, yet its usefulness is fading as Bostic retires in February and Powell’s own future at the Fed is uncertain. He could always linger just to irritate Trump, but that’s hardly monetary policy.

Asia traded cautiously. Japan’s Topix was flat, Australia’s ASX 200 slipped 0.45 percent on hawkish RBA vibes, and Hong Kong’s Hang Seng fell 1.29 percent as higher US yields soured sentiment. Europe is mixed as of 6:45 am, with the DAX up 0.32 percent, the CAC 40 down 0.57 percent, and both the FTSE 100 and S&P 500 futures treading water. DXY sits at 99.06, US 10-year yields are 4.162 percent, and gold is 4206.21.

EURUSD in a 1.1633-1.1658 range is marking time as firmer US yields cap rallies. German trade data didn’t help, with exports eking out a 0.1 percent gain.

GBPUSD in a 1.3318-1.3357 range is consolidating last week’s budget bounce. The uptrend holds above 1.3250 and a break of 1.3390 targets 1.3490.

USDJPY in a 155.74-156.43 range firmed alongside Treasury yields, even as traders kept one eye on an earthquake and tsunami warning.

AUDUSD in a post-RBA wake traded its 3.6 percent no-change decision in a hectic drop-and-pop. Governor Bullock warned cuts aren’t on the menu and risks lean higher, keeping rallies contained.