- US Government shutdown talks may have made a breakthrough.
- Oil prices lower on oversupply fears.
- US dollar opens with losses across the board.
USDCAD open: 1.4019, overnight range 1.4001-1.4058, close, 1.4042, WTI 59.87, Gold 4080.93
The Canadian dollar got a boost from a sharp improvement in global risk sentiment overnight. Chinese inflation picked up a rose more than expected while US and China trade tensions continued to thaw. China followed up on last week’s promises and announced a two year suspension of restrictions on US exports of some rare earth minerals.
The biggest news was apparent progress in US government shutdown talks which could reopen the government by the end of the week.
WTI oil traded lower within a 59.75–60.48 range, pressured by persistent fears of oversupply. The International Energy Agency (IEA) recently projected that global output will rise by 2.3 million barrels per day in 2026, while demand is expected to grow by only 700,000 bpd.
Global risk sentiment improved after the US Senate voted to advance a plan to reopen the government, with eight Democrats joining Republicans in support. Another vote is needed before it moves to the House of Representatives, and then to President Trump’s desk—a process that could still take several days before the government officially reopens.
Friday’s weak Michigan Consumer Sentiment Index, which hit a 3.5-year low, underscored growing public dissatisfaction with Trump’s handling of the economy.
Asian equity markets rallied, with Hong Kong’s Hang Seng gaining 1.55%, Japan’s TOPIX rising 0.56%, and Australia’s ASX 200 climbing 0.76%.
As of 7:10 a.m., the German DAX is up 1.92%, France’s CAC-40 has rallied 1.50%, and the FTSE 100 and S&P 500 futures are both higher by 0.97%. The US Dollar Index (DXY) sits at 99.59, and the US 10-year Treasury yield is 4.134%.
EURUSD traded in a 1.1542–1.1583 range, with the low in Asia and the peak in early Europe. It sits at 1.1563 in New York as traders weigh US government shutdown developments and disappointing Eurozone Sentix Investor Confidence data (-7.4 vs. forecast -3.9, previous -5.4). The downtrend from September remains intact while prices stay below 1.1620.
GBPUSD traded between 1.3136 and 1.3184, mirroring broad US dollar weakness on improved risk sentiment and a modestly bullish technical tone. Thursday’s move above 1.3070 broke a week-long downtrend, and traders are eyeing a test of the September 17 downtrend line at 1.3310. UK employment data is due tomorrow.
USDJPY opened firm and climbed from 153.46 to 154.25, now holding near 154.19 in New York. Downward revisions to BoJ rate-hike expectations and Prime Minister Sanae Takaichi’s proposed stimulus budget have supported the pair. JPMorgan Chase raised its year-end forecast to 156.00.
AUDUSD advanced in a 0.6490–0.6540 range, supported by stronger global risk sentiment and hawkish remarks from RBA Deputy Governor Andrew Hauser, who emphasized the “policy challenges” requiring continued tight monetary settings to control inflation. Optimism was also buoyed by better-than-expected Chinese data.
