Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3830-1.4080
Euro 1.6070-1.6320
Sterling 1.8530-1.8780
WTI Oil (opening level) $62.27
The CAD/USD is opening at 1.3949 ( 0.7169 )
USD/CAD await the official employment data for September, which will be released on Friday.
The labour market data is expected to show that the job conditions deteriorated further, with the Unemployment Rate rising to 7.2% from 7.1% in September.
USD/CAD stays above the 20-day Exponential Moving Average (EMA), which trades around 1.3901, suggesting that the near-term trend is bullish.
The 14-day Relative Strength Index (RSI) oscillates above 60, indicating a strong bullish momentum.
Going forward, a further upside move by the pair above the psychological level of 1.4000 would open the door towards the April 9 low of 1.4075, followed by the April 8 low of 1.4144.
On the flip side, the pricing could slide towards the round level of 1.3600 and June 16 low of 1.3540 if it breaks below the August 7 low of 1.3722.
Headlines
· China declares comprehensive export controls on rare earth exports as a move to protect national security. Under new rules, Chinese companies will need government approval to export products containing rare earth minerals sourced or processed in China, including more finished goods like rare earth magnets that are produced there. China positioned the measures as necessary to prevent the “misuse of rare-earth materials in military and other sensitive sectors.”
· Hamas declared a deal to end the Gaza conflict after indirect talks with Israel in Egypt, as reported on Oct. 8 by AFP. The agreement includes ceasefire terms, withdrawal of Israeli forces, humanitarian aid access, and prisoner exchanges. Hamas urged US President Trump to ensure Israel adheres to the deal without delays or evasion.
· The Federal Reserve expressed concern over employment risks while remaining cautious on inflation, per the latest FOMC minutes. Most officials supported moving to a neutral rate, yet inflation pressures remained a concern. Many anticipate additional easing this year, with half predicting two more cuts by 2025. Recently, the Fed cut rates by 25bps to 4.00%-4.25%, the first since December.
· Germany's industrial production fell by 4.3% in August, the largest drop since March 2022, driven by declines in automotive (-18.5%) and other key sectors. This exceeded expectations of a 1% decline. On an annual basis, output decreased 3.9%, reversing a 1.5% gain from the previous year.
Key Points
· Equities: U.S. set fresh records on AI strength and dovish Fed minutes; Europe rose on steel-quota curbs despite weak German data and France jitters; Asia mixed with Hong Kong softer as China reopens
· Volatility: VIX lower – calm index, high dispersion – SPX ±22 pts – Powell speech – earnings next
· Digital Assets: BTC $122k – ETF inflows – ETH soft – alt-coins mixed – institutional flows steady
· Currencies: USD rally fizzling, JPY sell-off also eases as Takaichi struggles to piece together governing coalition
· Commodities: Gold bounces from USD 4,000 support, crude softer as Middle East tensions ease
· Fixed Income: Yields little changed in Japan or US, France-Germany yield spread eases