Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3400-1.3650
Euro 1.6150-1.6400
Sterling 1.8550-1.8800
WTI Oil (opening level) $64.70
The CAD/USD is opening at 1.3525 ( 0.7394 )
USD/CAD broke below its June 2025 low at 1.3540.
BOC delivered on expectations. Yesterday, the BOC left the policy rate unchanged at 2.25% for second straight meeting. The BOC also reiterated its on hold guidance noting that the current policy rate remains appropriate
The BOC adopted a marginally more cautious tone. The BOC stressed that “uncertainty is heightened” vs. “uncertainty remains elevated” in December. That means the BOC will not be in a rush to start raising the policy rate.
Headlines
· The Fed maintained rates at 3.5%–3.75% in its meeting for January 2026 after last year's cuts. Governors Miran and Waller wanted a 25bps cut instead. Economic growth is steady, with low job gains and stable unemployment amid high inflation. The Fed will monitor data for future rate changes. Chair Powell stated current rates support goals as the economy enters 2026 strongly.
· US Treasury Secretary Bessent pushed back against notion that Trump administration is pursuing a weaker US dollar, stressing the preference for a strong dollar and denying involvement in Japan's markets. Earlier, the dollar hit 2022 lows due to speculation and Trump's indifference. Tariff threats and shutdown fears contributed to the "sell America" trade.
· Bessent said there's no trade deal with South Korea until ratification and criticized the EU for freezing the deal during Trump's Davos speech. A South Korean adviser warned of possible US tariff hikes over future investment disagreements.
Key Points
Equities: US finished mixed after the Fed, Europe fell on luxury earnings, while Asia rallied on Hong Kong and AI headlines.
Volatility: Fed “uncertainty elevated”, vix1d jump, oil on iran risk
Digital Assets: BTC/ETH softer, IBIT selective inflows, macro-driven sentiment
Fixed Income: JGB yields quiet Thursday, Long US treasuries under pressure as USD weakens.
Currencies: USD weakens after volatility around Bessent comments on strong USD policy. NOK and AUD strongest among G10 FX.
Commodities: Explosive push higher with gold, silver and copper hitting fresh record highs, while Brent trades near USD 70.