Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3650-1.3900
Euro 1.6040-1.6290
Sterling 1.8500-1.8750
WTI Oil (opening level) $60.51
The CAD/USD is opening at 1.3770 ( 0.7262 )
USD/CAD could receive support amid higher Oil prices, given Canada’s status as the largest crude exporter to the USA
Crude Oil prices gain as markets evaluate the global oil outlook.
Saudi Aramco’s CEO eased oversupply concerns, highlighting resilient demand in emerging economies, with global consumption hitting record highs last year and set to increase further in 2026.
The USD/CAD pair also faces challenges as the USD struggles on risk aversion, which could be attributed to the geopolitical tensions. Trump first warned several European nations opposing his Greenland takeover plan of fresh tariffs, but later reversed his stance after reaching a framework agreement with NATO for a possible future deal.
However, the US-NATO deal remains unclear, with markets speculating it may include mineral rights and missile deployments. Meanwhile, market analysts warn that Europe could use its large holdings of US assets as leverage, after a Danish pension fund said it would divest from US Treasuries, heightening market uncertainty.
The US Gross Domestic Product Annualized grew at 4.4% in the third quarter of 2025, slightly more than expected and the previous reading of 4.3%. Additionally, the US Initial Jobless Claims came in at 200K for the week ending January 17. The latest print came in short of initial estimates (212K) and was a tad higher than the previous week’s 199K (revised from 198K).
Headlines
· The Bank of Japan left its policy rate unchanged at 0.75% as expected, but the meeting was seen as somewhat hawkish as forecasts for core inflation were raised for the next three years (year three raised to 2.1% vs. 2.0% prior) and a hawkish member dissented in favour of a rate hike. Japanese government bond yields rose to new highs at the short end of the curve as the market brought forward anticipation of the next rate hike, but the Japanese yen weakened ahead of Bank of Japan Governor Ueda’s press conference late Friday in Tokyo.
· US PCE price index rose 0.2% m/m in November, consistent with October and expectations. In November 2025, goods prices rebounded 0.2%, while services growth slowed. Core PCE increased 0.2%. Annual headline and core PCE inflation reached 2.8%, aligning with expectations. The PCE index is the Fed's preferred inflation measure.
· US initial jobless claims rose by 1,000 to 200,000 for the week ending January 17th, below expectations. Continuing claims dropped by 26,000 to 1,849,000. Federal employee claims increased by 364 to 1,010 amid the government shutdown.
· Japan's inflation decreased to 2.1% from 2.9%, the lowest since March 2022. In December 2025, food inflation slowed, energy costs turned negative, and core inflation fell to 2.4%. Monthly CPI dropped 0.1%, reversing November's 0.3% gain.
· The US economy grew 4.4% annualized in Q3 2025, exceeding the 4.3% initial estimate and showing the strongest growth since Q3 2023. This was driven by stronger exports, higher consumer spending, and increased government outlays. Imports fell 4.4%, and fixed investment rose 0.8%.
Key Points
· Equities: Stocks rose in the US and Europe as tariff worries eased, Japan up and Hong Kong steady.
· Volatility: Vix lower, headline-driven risk, mild downside skew
· Digital assets: Bitcoin weak, Ethereum under pressure, IBIT & ETHA outflows
· Currencies: USD weakened sharply yesterday, JPY even weaker overnight despite hawkish BoJ.
· Commodities: BCOM hits fresh record as gold and silver surge toward USD 5,000 and USD 100, while natural gas jumps most in four years
· Fixed Income: Japan’s short yields rise on hawkish BoJ, US treasuries quiet.