Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3480-1.3730
Euro 1.6040-1.6290
Sterling 1.8450-1.8700
WTI Oil (opening level) $63.72
The CAD/USD is opening at 1.3607 ( 0.7349 )
The US Dollar Index, which measures the value of the USD against six major currencies, extends its losses for the second successive session and is trading near 97.20
The USD struggles as traders adopt caution ahead of looming key economic data delayed by the partial government shutdown. The January jobs report, due Wednesday, is expected to signal stabilization in the labor market, with the US Nonfarm Payrolls to add 70,000 jobs, while the Unemployment Rate is seen holding steady at 4.4%. The postponed January consumer price index reading is scheduled for Friday.
The yen strengthened against the USD to 156.22 from a 157.75 high on Friday after Japan’s top currency official said the government remains on high alert as it monitors the foreign exchange market following the ruling party’s landslide election victory. Officials aim to stabilize the currency amid fiscal stimulus plans. While boosting exports, a weaker yen strains household budgets and risks further depreciation. That victory has had a direct impact on the market and will likely be the catalyse to move the FX market further.
Headlines
· Japan's Prime Minister Sanae Takaichi's ruling party clinched a landmark post-war victory, securing a two-thirds super majority in the lower house. A super majority in the lower house will make it easier for her coalition to pass legislation and put the contentious issue of constitutional amendment back on the table.
· U.S. Treasury Secretary Scott Bessent highlighted Chinese traders' influence in recent volatile gold price swings, and that Trump’s nominee to become the next Federal Reserve chair, Kevin Warsh, “is going to be very independent, but mindful that the Fed is accountable to the American people”
· Fed Vice Chair Jefferson stated that the current monetary policy is well-positioned for future conditions and emphasized preventing further labor market weakening. Fed's Daly is open to interest rate decisions, considering possible cuts in 2026 depending on inflation and labor market data. Meanwhile, House Minority Leader Jeffries announced that Democrats will not pass further funding for the Department of Homeland Security without ICE reforms.
· Morgan McSweeney, Chief of Staff to Labour’s Keir Starmer, resigned amidst controversy over Peter Mandelson's appointment as UK ambassador to Washington, linked to Jeffrey Epstein.
· Chinese regulators have advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility. The directive doesn’t apply to China’s state holdings of US Treasuries and was framed around diversifying market risk rather than anything to do with geopolitical maneuvering or a fundamental loss of confidence in US creditworthiness.
Key Points
· Equities: Semi-led rebound in the US, while Europe rallies with sharp dispersion and Japan extends record strength post-election
· Volatility: Calm rebound, but key U.S. data ahead, downside protection still in demand
· Digital assets: Crypto stabilises, ETF flows cautious, confidence still fragile
· Currencies: Dollar trades softer on renewed risk appetite and post-election yen strength
· Commodities: Precious metals recover strongly; oil drifts lower on easing tensions
· Fixed Income: Treasuries slip as risk appetite returns; JGB yields rise on fiscal concerns