- US regional banks trigger bout of risk aversion
- Trumps chat with Putin weighs on oil
- US opens catches a bid.
USDCAD open: 1.4043, overnight range 1.4032-1.4067 close, 1.4058, WTI 56.88, Gold 4338.70
The Canadian dollar is treading water following a wave of risk aversion sentiment that washed over global markets. The surge in gold prices to another record partially offset bearish sentiment from falling oil prices.
Prime Minister Mark Carney said he would not retaliate to Trump’s latest tariff increase on softwood lumber saying “Right now with the Americans we are engaged in deep negotiations, intensive negotiations on several sectors of the Canadian economy - energy, aluminum and the steel sector. There are times to hit back and times to talk and right now is the time to talk.”
WTI oil traded negatively in a 56.61-57.56 range due to ongoing fears of an oil glut in the first half of 2026 with escalating US and China trade tensions aggravating the risk.
JPMorgan Chase President Jamie Dimon cautioned that “when you see one cockroach, there’s probably more,” after the failures of auto lender Tricolor Holdings and auto parts supplier First Brands. His warning proved accurate. Shares of U.S. regional banks slid sharply when Zions Bancorp and Western Alliance Bancorp disclosed losses tied to what they called “fraudulent loans.”
The unsettling headlines, combined with deepening China–U.S. trade tensions and a prolonged American government shutdown that’s holding up key data releases, drove investors toward traditional safe havens. The yen and Swiss franc advanced, gold surged from 4279.22 to 4379.29, and the 10-year Treasury yield slipped to 3.96%.
Asian equity markets mirrored Wall Street’s weakness. Japan’s Topix declined 1.03%, Australia’s ASX 200 dropped 0.81%, and Hong Kong’s Hang Seng tumbled 2.48%. By early New York trading, Europe was also deep in the red: Germany’s DAX was down 2.11%, the UK’s FTSE 100 off 1.29%, and France’s CAC-40 lower by 0.78%. S&P 500 futures fell 0.97%, the U.S. Dollar Index hovered at 98.25, the 10-year yield stayed near 3.96%, and gold traded around 4336.96.
EURUSD traded in a 1.1682–1.1729 range, gaining on overall U.S. dollar weakness before slipping to 1.1697. Political calm in France after Prime Minister Sébastien Lecornu survived a confidence challenge helped steady the single currency, while Eurozone core inflation printed at 2.4% year over year versus 2.3% expected.
GBPUSD ranged between 1.3411 and 1.3472, weighed down by sour market sentiment and concerns about global growth. The combination of regional bank turmoil and U.S.–China friction kept traders cautious heading into the weekend.
USDJPY moved between 149.38 and 150.45 as risk aversion drove demand for the yen. Comments from several Fed officials hinting that U.S. interest rates still have room to fall reinforced the downward bias.
AUDUSD traded in a 0.6444–0.6493 band, pressured by the broad risk-off mood tied to financial instability and trade tension. Weak domestic jobs data added another drag on sentiment.
