- Positive risk sentiment lifts global stocks and weighs on US dollar
- WTI oil prices trading defensively
- US dollar consolidating losses.
USDCAD open: 1.3759, overnight range 1.3755-1.3782, close 1.3772, WTI 57.58, Gold 4330.58.
The Canadian dollar rallied on the back of broad US dollar weakness due to divergent BoC and Fed monetary policy outlooks. The BoC is expected to leave rates unchanged for the foreseeable futures while the Fed is widely expected to ease monetary policy further in 2026. The surge in gold prices also contributed to Canadian dollar gains.
WTI oil sank in a 57.37-58.19 band because of concerns that a Ukraine Russian peace deal would see additional Russian oil supplies as sanctions get repealed.
Canada Building Permits, Capacity Utilization and Wholesale Sales data are ahead.
With central banks effectively done for the year, stale data on the calendar, and the holidays looming, markets are slipping into year-end autopilot. Traders are closing, or nearly closing, their 2025 books and retreating to the sidelines. The proposed Ukraine–Russia peace framework appears to involve conceding everything Moscow wants, while Trump, whose word functions more as a placeholder than a promise, offers little more than vague assurances of security.
Hopes for further Federal Reserve easing pushed both the S&P 500 and the TSX to fresh record closes. Today, global equity markets and gold are firmer, while the US dollar is under modest pressure. Asian markets led the way, with Japan, Hong Kong, and Australia all posting solid gains, while early European trading is mixed and US equity futures are slightly softer. The US 10-year yield is holding near 4.18%.
EURUSD in a 1.1723–1.1747 range is trading near its session low in New York, largely the result of pre-weekend profit-taking. German November inflation was exactly as expected and barely registered with markets. Attention has shifted to next Thursday’s ECB meeting, which could strike a hawkish tone and provide underlying support for the euro.
GBPUSD in a 1.3367–1.3400 range is trading with a mild bearish bias after a disappointing GDP release. The UK economy contracted by 0.1% in the three months to October, with analysts pointing to weakness across both services and construction. The data effectively locked in a Bank of England rate cut next week, and any upside in sterling may be capped by EURGBP demand as the ECB leans hawkish and Deutsche Bank forecasts two additional BoE cuts in 2026.
USDJPY in a 155.45–155.99 range has recovered yesterday’s losses, but upside momentum is limited. Expectations that the Bank of Japan will raise rates next week, and signal that further hikes are coming, are acting as a brake on further gains.
AUDUSD in a 0.6660–0.6678 range is consolidating after recent advances. Broad-based US dollar softness is providing support, alongside speculation that the Reserve Bank of Australia’s next policy move could be a rate hike.
