Canadian Dollar Update – Canadian dollar has modestly bullish bias

• US government shutdown could end with House vote today.
• BoC Summary of Deliberations report ahead.
• US dollar trading defensively except against yen.

USDCAD open:1.4017, overnight range 1.4003-1.4023, close, 1.4020, WTI 60.63, Gold 4129.20

The Canadian dollar drifted higher in a choppy overnight session as traders reacted to improved global risk sentiment on hopes that the U.S. government shutdown is finally nearing resolution. The House of Representatives is scheduled to vote this afternoon on the Senate’s funding bill.

Attention now turns to the Bank of Canada’s Summary of Deliberations, due later today. Markets will comb through the report for hints on the policy path following the October 29 rate cut to 2.25%. That decision was widely viewed as a “hawkish cut,” as Governor Tiff Macklem effectively passing the economic growth baton to fiscal policymakers.

A full lineup of Federal Reserve officials is scheduled to speak today, including New York Fed President John Williams, Governors Stephen Miran and Christopher Waller.

Asian equity markets traded mostly higher overnight. Hong Kong’s Hang Seng climbed 0.85%, Japan’s TOPIX advanced 1.14%, while Australia’s ASX 200 slipped 0.22%.

As of 7:00 am, the German DAX and French CAC-40 have risen by 1.03% while the UK FTSE 100 is down 0.15%. S&P 500 futures 0.25% higher and the US Dollar Index sits at 99.59. Tthe 10-year Treasury yield is 4.086%.

EURUSD held within a narrow 1.1565-1.1589 range, consolidating recent gains. Traders largely ignored Germany’s ZEW sentiment survey and inflation report, as both matched expectations and offered little to shift the ECB’s dovish narrative.

GBPUSD moved unevenly between 1.3110 and 1.3159 overnight. Softer-than-expected U.K. employment figures, showing a net loss of 22,000 jobs over the past three months and an uptick in unemployment to 5.0%, reinforced expectations of a potential Bank of England rate cut in December. Political noise added to the volatility, with speculation — denied by officials — that Prime Minister Starmer could face a leadership challenge after the upcoming budget.

USDJPY extended its rally, climbing from 153.05 to 154.91 — territory last reached in February 2025. The move drew the usual warnings from Japan’s Finance Minister Satsuki Katayama, who said officials are watching “one-sided, rapid currency moves” with “a high sense of urgency.” Traders were unimpressed, dismissing the remarks as routine jawboning. The yen remains pressured by expectations for additional fiscal stimulus, improved global risk sentiment, and receding chances of a near-term BoJ rate hike.

AUDUSD traded between 0.6215 and 0.6545 but eased from its session peak in early New York dealings.