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canadian dollar update - knightsbridge fx

Canadian Dollar Update – Canadian dollar on firm footing

Published by KnightsbridgeFX
February 10, 2026 | Daily Update
  • White House official hinting at weak NFP report, tomorrow
  • CAD/US interest rate spreads favour Loonie
  • US dollar continues to slide

 

USDCAD open: 1.3562, overnight range 1.3548-1.3572, close 1.3558, WTI 64.33, Gold 5047.12

The Canadian dollar rallied yesterday and then traded sideways overnight.  The rally occurred despite a gloomy BoC Market Participants survey.

The survey depicts a Canadian economy stuck in low gear rather than heading for either boom or bust. Growth is expected to hover around 1.5–2 percent through 2027, with most respondents convinced the economy is operating below potential. Inflation is seen settling comfortably near the Bank of Canada’s 2 percent target, removing price pressures as a policy constraint. As a result, interest rates are expected to remain unchanged through 2026, with only a gradual normalization thereafter. Trade tensions dominate both upside and downside risks, underscoring how external forces continue to shape Canada’s economic outlook.

WTI oil remained bid in a 63.88-64.68 range due to ongoing tensions between the US and Iran.  Traders are also awaiting a Trump decision today that will scrap the US emissions policy.

There is no shortage of US data on today’s calendar. December retail sales are expected to rise 0.4% after a 0.6% increase in November. The employment cost index for the fourth quarter, import and export price indexes, and business inventories are also due, giving markets plenty to digest ahead of tomorrow’s payroll report.

Equity markets in Asia delivered a mixed performance. Japan’s Topix surged 1.90%, Hong Kong’s Hang Seng advanced 0.58%, and Australia’s ASX 200 finished the session unchanged.

As of 7:45 am, France’s CAC 40 is up 0.25%, Germany’s DAX is flat and the UK FTSE 100 is down 0.24%. S&P 500 futures are unchanged,  the US Dollar Index sits at 96.88, and the 10-year Treasury yield is 4.175%.

EURUSD traded in a 1.1896–1.1920 range as it consolidates recent gains. The euro continues to draw support from expectations of a weak US payrolls report, dovish rhetoric from Federal Reserve officials, and growing talk of hedge funds and sovereign investors trimming exposure to US Treasuries and the dollar.

GBPUSD moved within a 1.3658–1.3700 range, lifted by broad-based US dollar softness. In addition, reduced political tensions after several Labour ministers publicly backed Prime Minister Starmer supported prices.

USDJPY dropped155.05–156.30 range, easing as markets reassessed Japan’s policy outlook. Investors are increasingly focused on Prime Minister Sanae Takaichi’s fiscal stimulus proposals, which are seen as potentially strong enough to support growth and give the Bank of Japan scope to raise interest rates.

AUDUSD drifted in a 0.7065–0.7096 range as it digested the previous session’s gains. Support comes from a more hawkish tone around RBA policy, a firmer Chinese yuan, and resilient commodity prices. NAB business confidence edged up to 3 in January from 2, while business conditions slipped to 7 from 9.