- Trump comment sinks greenback
- No change in BOC or Fed rates today
- US dollar under pressure across the board
USDCAD open: 1.3559, overnight range 1.3561-1.3615, close 1.3578, WTI 62.12, Gold 5287.74
The Canadian dollar rallied sharply on remarks from Trump that he was comfortable with the dollar’s value despite its recent weakness. The comment sent traders scrambling to test how much downside tolerance existed, triggering aggressive selling across the greenback.
The Bank of Canada is widely expected to leave its benchmark rate unchanged while releasing its quarterly Monetary Policy Report, with markets focused on guidance rather than policy action.
WTI traded in a 62.08–63.00 range, supported by broad US dollar weakness and an API report showing a 247,000-barrel draw in US crude inventories. Prices have since eased back and were trading near 62.43 in New York.
Trump brushed aside concerns about recent US dollar weakness, saying the currency was “doing great,” a remark that immediately set off a round of selling across FX markets. Traders quickly shifted focus to how much further the dollar could fall before the tone changed. The comments triggered a sharp move into traditional safe havens, with gold and the Swiss franc surging. Gold is up roughly 12% over the past week, while the franc has gained about 3.9%, underscoring the scale of the defensive repositioning.
The Federal Reserve is widely expected to leave rates unchanged at 3.75%, with policymakers constrained by still-elevated inflation and a desire to maintain institutional independence.
Asian equity markets closed mixed as currency moves and domestic politics shaped performance. Japan’s Topix fell 0.79%, weighed down by political uncertainty and a sharply stronger yen. Hong Kong’s Hang Seng rallied 2.58%, while Australia’s ASX 200 finished flat amid growing speculation that the RBA could raise rates at next week’s meeting.
As of 7:20 am, the French CAC-40 is down 1.18%, the UK’s FTSE 100 has slipped 0.51%, and Germany’s DAX has lost 0.39% and S&P 500 futures up 0.25%. The US Dollar Index is trading at 96.20, and the 10-year Treasury yield is at 4.244%.
EURUSD traded in a 1.1971–1.2046 range overnight after peaking at 1.2082 in the prior session. The move above 1.2000 is unlikely to sit comfortably with ECB policymakers, as currency strength risks pushing inflation even further below the 2.0% target. The single currency is also drawing support from the newly announced EU-India trade agreement. If strength is sustained, rate cut expectations could resurface, with a clear break above 1.2000 opening the door to 1.2350.
GBPUSD was cautious in a 1.3775–1.3850 range after topping out at 1.3858, with price action closely tracking broader US dollar sentiment. Sterling also benefited from position adjustment, as traders unwound bearish bets built earlier in the year.
USDJPY maintained its negative biasin a 152.18–153.07 range after retreating from 154.88. The pair was already under pressure following reports that Japanese and US officials had “checked rates,” language that often precedes intervention. Selling intensified after the dollar weakened broadly, leaving traders cautious ahead of the FOMC decision.
AUDUSD traded in a 0.6980–0.7023 range, supported by broad US dollar weakness and rising expectations that the RBA could lift rates to 3.85% at its February 3 meeting. Australia’s major banks have increasingly aligned around the view that persistent inflation pressures make a hike likely.
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