- Trump’ s Fed Chair comment sparks US dollar selling.
- Oil prices rebound on API drawdown.
- US dollar opens with losses across the board
USDCAD open: 1.3948, overnight range 1.3945-1.3975, close 1.3968, WTI 59.50, Gold 4200.94
The Canadian dollar has caught an updraft thanks to diverging expectations for the December BoC and Fed meetings. Markets are almost fully priced for a 25 bp Fed rate cut, while the Bank of Canada is widely expected to leave its benchmark rate unchanged. Beyond December, traders are already looking toward 2026 and assuming that Trump’s preferred choice for Fed Chair will champion looser monetary policy, reinforcing downside pressure on the US dollar.
WTI oil traded in a 58.38-59.62 range and climbed steadily after the latest American Petroleum Institute report showed crude inventories fell by 2.48 million barrels last week, following a 1.9 million barrel draw previously. Prices were also supported by the lack of movement in Ukraine–Russia peace talks, which kept geopolitical risk premia embedded in the market.
The ADP employment report for November is expected to show a meagre 5000 job gain, sharply lower than the previous 42,000. ISM Services PMI follows, with forecasts calling for 52.1 compared to 52.4 in October. Neither release is expected to shift the view that the Fed is easing toward a softer policy stance.
Asian equity markets delivered a mixed performance. Australia’s ASX 200 edged up 0.19%, Japan’s Topix slipped 0.20%, and Hong Kong’s Hang Seng index lost 1.39%. As of 7:00 am, European bourses are circling flat levels. The German DAX is up 0.18%, the French CAC-40 is unchanged, and the FTSE 100 has dipped 0.14%. The US Dollar Index is 98.97, the US 10-year Treasury yield is 4.063%, and gold is trading at $4207.65.
EURUSD traded in a 1.1591-1.1654 range in a session dominated by speculation about a potential leadership shake-up at the Fed after Trump hinted that National Economic Director Kevin Hasset could replace Chair Powell. Traders view Mr. Hasset as firmly aligned with the administration, fuelling expectations of a more dovish tilt. At the same time, markets are increasingly convinced that the ECB’s easing cycle is reaching its limits. Firmer German and Eurozone Services and Composite PMI readings helped underpin the single currency, although the move stalled after slightly softer PPI data.
GBPUSD moved higher in a 1.3205-1.3289 range as US dollar selling persisted on the belief that a more accommodative Fed awaits in 2026. The rally unfolded even though UK Services PMI slipped to 51.3 from 52.3. S&P’s Tim Moore said survey responses pointed to fragile client confidence, rising caution, and lingering uncertainty. Gains will remain corrective unless GBPUSD decisively tops 1.3330.
USDJPY traded in a 155.51-155.91 range as Japanese data suggested another modest expansion in the services sector. Services PMI inched up to 53.2 from 53.1. S&P Global’s Annabel Fiddes said services strength offset softer factory output and noted that rising inflationary pressures continue to shadow the outlook. The combination keeps speculation alive that the BoJ may eventually be forced to tighten.
AUDUSD is trading near the top of its 0.6553-0.6589 range, even after Q3 GDP grew just 0.4% q/q compared to the 0.7% forecast. Composite and Services PMI figures were close to expectations and failed to spark reaction. Broader US dollar weakness and the assumption that the RBA will remain on hold helped keep AUDUSD supported.
