Currency Markets Steady: USD Gains Ground Ahead of Key Payroll Data and Fed Signals

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3950-1.4200

Euro                1.6060-1.6310

Sterling           1.8230-1.8480

The CAD/USD is opening at 1.4068 ( 0.7108 )

USD/CAD remains stable after registering more than 0.5% gains, hovering around 1.4060.

The pair may further appreciate as the USD gains ground amid diminishing expectations for another Federal Reserve rate cut in December following the latest Federal Open Market Committee Meeting Minutes.

Traders await the release of the US September Nonfarm Payrolls later on Thursday to gain fresh insight into the Fed's policy outlook.

FOMC Minutes for the October 28-29 meeting indicated that Fed officials are divided and cautious about the path forward for interest rates. Most participants indicated further rate cuts would likely be appropriate over time, but several indicated they did not necessarily view a reduction in December as appropriate.

Headlines

• Bank of Canada Deputy Governor Vincent stated that Canada's weak productivity is a systemic issue needing a coordinated approach, as it hampers addressing frequent economic shocks. He emphasized the importance of the link between rising labor costs and productivity in inflation assessments, according to Reuters.
• Nvidia shares jumped over 5% in after-hours trading after reporting strong earnings, revenue, and an upbeat fourth-quarter forecast. CEO Jensen Huang said demand for its Blackwell chips is “off the charts.”
• Federal Reserve officials were split on lowering the federal funds rate in October. Most favored further cuts for December, though some were skeptical about another 25bps cut. The Fed decreased the rate by 25 bps to 3.75%–4.00% in October 2025.
• Japan is looking to compile an economic package worth more than 20 trillion yen (USD 129 billion, which is around 3% of GDP and the largest since the pandemic) on Friday to ease the pain of rising living costs, even as the dire weakness in its currency raises inflation risks. This according to a draft of the plan seen by Reuters.
• The BLS will delay the November jobs report until after the Fed’s December meeting, clouding the policy outlook and raising odds of a hold. The October report is cancelled.
• UK inflation fell to 3.6% in October 2025, its lowest in four months, but slightly higher than 3.5% expectations. Housing and utilities saw slower price increases due to energy cap changes. Transport inflation stayed at 3.8%, but food and recreation rose. Monthly CPI rose 0.4%, and core inflation hit a six-month low of 3.4% as expected, while Services rose 4.5% vs. 4.6% expected.
• In August 2025, US exports rose $0.2 billion to $280.8 billion amid trade policy uncertainty. Service exports grew $0.8 billion, while goods exports fell $0.5 billion due to declines in consumer goods, industrial supplies, and automotive exports. A $2.4 billion increase in capital goods, especially computers, provided some offset.

Key Points

• Equities: US indices up while Europe was broadly flat, Asia stayed cautious with Hong Kong weaker on China and policy worries
• Volatility: Volatility stays elevated but controlled, with today’s macro data in focus
• Digital assets: BTC rebounds around 92k despite continued IBIT/ETHA outflows, miner accumulation, and alt-coins finding support
• Fixed income: Japanese government bond yields rip higher on anticipated large fiscal package emerges
• Currencies: JPY sent spinning into the abyss on concerns linked to fiscal dynamics. USD broadly firm
• Commodities: Gold softens on Fed caution; crude steadies as traders assess looming US sanctions