- US Government shutdown delays Friday’s NFP report.
- Trump and India announce trade deal
- US dollar opens mixed to firmer.
USDCAD open: 1.3682, overnight range 1.3651-1.3685, close 1.3681, WTI 62.20, Gold 4898.46
The Canadian dollar dropped yesterday following a sharp upside surprise in the US ISM manufacturing index, which jumped to 52.6 from 47.9 in December. Broad-based US dollar demand followed, as the data reinforced expectations that the Fed will keep rates unchanged at the January 28 FOMC meeting.
Attention now shifts to Wednesday’s ADP employment report, which may carry more weight than usual as the partial US government shutdown has delayed Friday’s nonfarm payrolls release, leaving traders with fewer timely signals on labour market conditions.
WTI oil traded sideways in a 61.13–62.47 range, with markets weighing how increased Indian purchases of US crude, at the expense of sanctioned Russian supply, could affect expectations for a potential oil glut in the first half of 2026.
Asian equity markets tracked Wall Street higher, with Japan’s Topix jumping 3.10%, Australia’s ASX 200 adding 0.89%, and Hong Kong’s Hang Seng climbing 3.22%.
As of 7:30 am, the German DAX has risen 0.24% while the FTSE 100 index has fallen by 0.47% and the French CAC-40 is down 0.13%. S&P 500 futures are up 0.25%, the US Dollar Index is 97.61, and the 10-year Treasury yield was 4.285%.
EURUSD traded in a 1.1782-1.1825 range and was sitting near the bottom of that band in early New York trade. The euro found mild support after France’s parliament approved the 2026 budget, while French and Spanish data failed to generate interest.
GBPUSD traded in a 1.3658-1.3707 range and continued to consolidate last week’s advance, though the bias leaned modestly lower while prices remained below 1.3705. Sterling has been moving largely in line with broader US dollar sentiment, but caution has crept in ahead of Thursday’s Bank of England rate decision. The BoE is widely expected to hold its policy rate at 3.75% as inflation pressures remain sticky.
USDJPY traded in a 155.31-155.89 range as the pair paused after Monday’s gains in Asia before briefly pushing higher during the European session. Support continues to come from political uncertainty, as concerns persist that a stronger showing by Prime Minister Sanae Takaichi in the upcoming election could see fiscal stimulus take priority over monetary tightening.
AUDUSD traded in a 0.6946-0.7050 range after surging in response to the Reserve Bank of Australia’s decision to raise its benchmark rate by 25 basis points to 3.85%. The accompanying statement struck a hawkish tone, citing a renewed pickup in inflation during the second half of last year driven partly by tighter capacity constraints. Expectations for another rate hike as soon as May have increased, although prices had eased back toward 0.7005 by the New York open.
