Canadian Dollar Update, October 13, 2026 – Canadian Dollar steady but soft

Canadian Dollar steady but soft

• Trump’s diesel deal with Russia largely ignored
• Treasury yields continue to slide
• US dollar opens with gains across the board

USDCAD open (6:00 am): 1.4259, range since Friday, 1.4240-1.4289, close 1.4284, close 1.4284, WTI $91.94, Gold $4,185.31.

The Canadian dollar took it on the chin Friday,  when Canada’s September jobs report revealed another 68,300 positions had vanished, on top of August’s 41,700 losses, and the unemployment rate climbed to 6.5%. Canadian two-year yields slid on the news, pushing the spread against US yields out to roughly -161 basis points, although it has since tightened to -158 bps today. With the Fed tilting hawkish and US tariffs still casting a shadow over Canada’s economic prospects, the loonie has little to cheer about.

WTI chopped around in an $89.98-$93.48 band, largely shrugging off Trump’s announcement of an energy ceasefire between Russia and Ukraine.

JPMorgan fires the starting gun on Q3 earnings season today and the results were a tad disappointing. Revenue rose 8% but analysts wanted more. It remains to be seen if other earnings reports will be enough for investors to drown out geopolitical jitters and the prospect of higher US interest rates. Yesterday,  Cleveland Fed President Beth Hammack argued that rates need to move higher.

Asian markets eked out modest gains, with Hong Kong’s Hang Seng leading the way, up 0.30%. Japan’s Topix added 0.14% and Australia’s ASX 200 finished unchanged.

As of 7:30 am, European bourses are higher, with Germany’s DAX rising 0.21%, the UK FTSE 100 gaining 0.62% higher while the France’s CAC-40 and S&P 500 futures are flat. The 10-year Treasury yield is at 5.186%, and the US Dollar Index is 102.28.

EURUSD is clawing its way off a multi-month low in a 1.1153-1.1197 range but keeps bumping its head on 1.1200, with French fiscal turmoil still weighing on the single currency. France is carrying more than €3.5 trillion of government debt and running a budget deficit well north of the EU’s 3% ceiling. Parliamentary budget debates get underway today, and few expect France’s fractured politics to deliver a credible fiscal fix.

GBPUSD climbed in a 1.3204-1.3241 band, lifted by UK BRC retail sales that jumped 1.0% against a 0.7% forecast and by Prime Minister Andy Burnham’s plan to open a “serious dialogue” with EU officials on the grounds that the status quo is not good enough. BoE hawk Megan Greene and Governor Andrew Bailey are not on the same page when it comes to delivering price stability, and that divide is keeping November rate hike bets alive.

USDJPY is pushing higher in a 157.84-158.69 range even as crude oil prices retreat. The yen is being undercut by dovish-sounding Bank of Japan officials, Governor Ueda among them, who poured cold water on an October hike, while markets continue to bet on a Federal Reserve rate increase in December. Japan’s wholesale inflation eased to 6.8%, and household spending sank 3.1% in August, its eighth straight monthly decline.

AUDUSD is grinding out gains in a 0.6950-0.6989 range, helped by firmer risk appetite, softer global bond yields led by Treasuries, a slightly weaker US dollar and hawkish RBA minutes. Policymakers fretted about upside inflation risks from higher oil, AI-related costs and limited spare capacity at home. The minutes stressed the need for timely action to keep inflation expectations anchored, and markets responded by pricing in more rate hikes by mid-2027.

The economic calendar is bare apart from US September existing home sales.