Forex News

• CAD treads water near 1.3550 against USD as markets digest ongoing US government shutdown and suspended economic data releases.

• BLS announced Friday's NFP jobs report is suspended until federal operations resume; US Capitol remains mired in budgetary gridlock.

• DXY steadied above 97.00 after Trump's nomination of Kevin Warsh for Fed Chair sparked risk-off flows.

The Canadian Dollar (CAD) traded in a narrow range against the US Dollar (USD) on Monday, holding near recent multi-month highs as markets grappled with the fallout from the ongoing US government shutdown. USD/CAD oscillated around the 1.3550 region, with traders hesitant to establish fresh directional positions ahead of a week now devoid of key US labor data.

The US Bureau of Labor Statistics (BLS) advised markets on Monday that Friday's scheduled publication of the latest Nonfarm Payrolls (NFP) jobs data package will be suspended until federal government operations resume. According to the BLS's official government website, "This website is currently not being updated due to the suspension of Federal government services. The last update to the site was Monday, February 2, 2026. Updates to the site will start again when the Federal government resumes operations."

Late 2025 saw the longest government-funding freeze on record, with a short-term stopgap funding solution only providing enough operating cash to keep federal services running through the end of January. Despite another half-measure to keep operational budgets in the black, the US Capitol continues to struggle to reach a budgetary consensus, keeping key federal offices underfunded. The partial shutdown has now extended into its third day, with House lawmakers expected to vote on a Senate-passed funding package as early as Tuesday.

The absence of official US economic data is forcing markets to rely on more volatile private-sector indicators, creating additional uncertainty for currency traders. With the Federal Reserve's (Fed) next policy decision not scheduled until March, the suspended labor data adds another layer of complexity to rate expectations. Markets are currently pricing in two Fed rate cuts for 2026, with the first move expected in June.

On the domestic front, the Bank of Canada (BoC) held its benchmark overnight rate at 2.25% at its January 28 meeting, citing modest near-term growth as population expansion slows and Canada adjusts to US protectionism. Canadian GDP flatlined in November, with manufacturing output contracting 1.3% month-on-month, underscoring that underlying momentum remains fragile. The BoC projects growth of 1.1% in 2026 and 1.5% in 2027.

The US Dollar Index (DXY) stabilized above the 97.00 handle on Monday following President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chairman on Friday. Markets view Warsh as a credible, institutionalist pick who would maintain Fed independence, triggering a sharp risk-off move that sent gold and silver plunging while supporting the Greenback. West Texas Intermediate (WTI) Crude Oil prices pulled back sharply toward $62.00 per barrel after touching four-month highs near $66.00 last week, as easing US-Iran tensions deflated the geopolitical risk premium.

Daily digest market movers: US shutdown clouds data outlook for CAD traders

• CAD held steady near 1.3550 against USD on Monday, with markets awaiting clarity on both the US shutdown and upcoming data releases.

• BLS confirmed Friday's NFP report is suspended indefinitely; official US labor data unavailable until the federal government resumes operations.

• US partial shutdown extends into third day as House prepares to vote on Senate-passed funding package; Speaker Johnson targets Tuesday resolution.

• BoC held rates at 2.25% on January 28, projecting modest 1.1% GDP growth in 2026 amid ongoing trade policy uncertainty.

• DXY steadied above 97.00 after Trump's nomination of Kevin Warsh for Fed Chair triggered broad risk-off sentiment on Friday.

• WTI Crude Oil retreated sharply toward $62.00 from four-month highs as US-Iran tensions eased, removing support for the commodity-linked Loonie.

Canadian Dollar price forecast

USD/CAD is consolidating near recent lows in the 1.3550 region after the pair's sharp decline from January highs near 1.3750. The break below the 78.6% Fibonacci retracement of the June advance has confirmed a meaningful shift in near-term momentum, with the 2023 trendline and the 2025 swing low near 1.3540 providing initial support. A sustained break below this threshold would expose the 100% extension at 1.3430 and the 2024 low-week close near 1.3360.

The 50-day Exponential Moving Average (EMA) continues to decline toward 1.3680, while the 200-day EMA sits near 1.3850. Price action remains well below both moving averages, maintaining the bearish structure that has dominated since the January reversal. The Relative Strength Index (RSI) is hovering in the low-40s, suggesting room for further downside before oversold conditions materialize.

Near-term resistance is seen at 1.3670, backed by the 2026 yearly open at 1.3725. Bulls would need a weekly close above this region to suggest a more significant low is in place. With official US data now suspended due to the government shutdown, volatility could remain subdued until markets receive fresh catalysts. The broader bias remains bearish while price holds below the 50-day EMA, though the absence of key economic releases may keep USD/CAD range-bound in the near term.

USD/CAD daily chart

• The Dow Jones surged over 500 points on Monday as factory activity expanded for the first time in over a year.

• Oracle shares rallied after the company announced plans to raise up to $50 billion to expand cloud infrastructure.

• Gold and silver pared losses from Friday's historic crash, while bitcoin stabilized above $78,000.

• Friday's jobs report suspended as government shutdown keeps federal agencies underfunded.

The Dow Jones Industrial Average (DJIA) jumped 504 points, or 1%, on Monday as Wall Street began February on a strong note, shaking off concerns from last week's precious metals rout. The S&P 500 rose 0.7%, buoyed by gains in Oracle Corporation (ORCL) shares following the company's announcement of a massive cloud expansion funding plan. The Nasdaq Composite gained 0.8%. Investors looked past recent losses in silver and bitcoin to focus on upbeat manufacturing data and a solid earnings season, with strategists noting that double-digit profit growth for a fifth consecutive quarter could help ease valuation concerns.

ISM manufacturing surges into expansion territory

US factory activity in January expanded for the first time in a year, the Institute for Supply Management reported Monday. The ISM manufacturing index jumped to 52.6, a 4.7-point increase from December and well ahead of the Dow Jones consensus estimate of 48.4. Prior to this reading, the index had been in contraction territory, below 50, for 26 consecutive months. The new orders index leapt 9.7 points to 57.1, its highest level since February 2022, while production surged 5.2 points to 55.9. Employment improved by 3.3 points to 48.1, though it remained below the 50 threshold, indicating growth.

Oracle rallies on cloud expansion plan; Nvidia slips on OpenAI doubts

Oracle Corporation (ORCL) shares climbed after the company announced Sunday that it plans to raise between $45 billion and $50 billion during 2026 to build additional cloud infrastructure capacity for major customers including Advanced Micro Devices Inc. (AMD), Meta Platforms Inc. (META), and OpenAI. Meanwhile, Nvidia Corporation (NVDA) fell 1% after The Wall Street Journal reported that the chipmaker's plans to invest $100 billion in OpenAI had stalled, with executives expressing doubt about the deal. The contrasting moves highlighted ongoing uncertainty about artificial intelligence investment returns even as hyperscalers continue committing massive capital to data center buildouts.

Metals and crypto stabilize after Friday's historic rout

Gold and Silver came off their lows on Monday, helping ease risk-off sentiment across markets. Spot Gold fell 4% while spot Silver dropped 7%, paring steeper losses from Friday when silver plunged around 30% in its worst single-day performance since 1980, and gold tumbled roughly 10%. Bitcoin fell below $80,000 for the first time since April, then stabilized above $78,000. The cryptocurrency's decline reflected investors taking risk off the table following the sharp precious metals selloff, though the recovery in metals prices helped trim equity losses and calmed jittery markets.

Earnings season on track for strongest growth in four years

More than 100 S&P 500 companies are set to report this week, including Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG), both of which traded higher Monday. Deutsche Bank strategists noted that earnings growth is on track to be the strongest in four years, with roughly 78% of reporting companies beating expectations, according to FactSet. The Walt Disney Company (DIS) reported results that topped analyst estimates but fell 4% after warning of headwinds from international travelers at domestic parks. The overall season has been solid despite some high-profile post-earnings declines, including Microsoft Corporation (MSFT).

Jobs report suspended amid ongoing government shutdown

The U.S. Bureau of Labor Statistics advised markets Monday that Friday's scheduled release of the January Nonfarm Payrolls report will be suspended until federal government operations resume. The agency's website noted that updates have been halted due to the suspension of federal services, with the last update occurring Monday. Late 2025 saw the longest government-funding freeze on record, and despite a short-term stopgap solution that provided operating cash through the end of January, Capitol Hill continues to struggle to reach a budgetary consensus, leaving key federal offices underfunded and economic data releases in limbo.

Dow Jones daily chart

The US Bureau of Labor Statistics (UBS) advised markets on Monday that Friday's scheduled publication of the latest Nonfarm Payrolls (NFP) jobs data package will be suspended until federal government operations resume.

According to the BLS's official government website, "This website is currently not being updated due to the suspension of Federal government services. The last update to the site was Monday, February 2, 2026. Updates to the site will start again when the Federal government resumes operations."

Late 2025 saw the longest government-funding freeze on record, with a short-term stopgap funding solution only providing enough operating cash to keep federal services running through the end of January. Despite another half-measure to keep operational budgets in the black, the US Capitol continues to struggle to reach a budgetary consensus, keeping key federal offices underfunded.

• USD/CAD climbs as broad US Dollar strength and a sharp drop in Oil prices weigh on the Canadian Dollar.
• US factory activity rebounds sharply, reinforcing support for the US Dollar.
• Attention turns to labour market data from both sides of the border, with US Nonfarm Payrolls and Canada’s employment report in focus.

The Canadian Dollar (CAD) extends its losses against the US Dollar (USD) on Monday, as renewed Greenback strength and falling Oil prices weigh on the commodity-linked Loonie. At the time of writing, USD/CAD is trading around 1.3676, up about 0.44% on the day.

Traders also digested the latest manufacturing Purchasing Managers Index (PMI) releases from both the United States (US) and Canada. In the US, the Institute for Supply Management (ISM) Manufacturing PMI rose to 52.6 in January from 47.9 in December, beating market expectations of 48.5.

The Employment Index improved to 48.1 in January from 44.9 previously. The New Orders Index jumped to 57.1 from 47.7, expanding for the first time since August and marking its strongest reading since February 2022. The Prices Paid Index rose to 59.0 in January, coming in below the 60.5 forecast but above the prior 58.5 reading.

At the same time, the S&P Global Manufacturing PMI edged higher to 52.4 from 51.9.

The upbeat data helped the Greenback extend its recovery, with the US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trading near 97.62, its highest level in about a week.

Further support comes from a more hawkish Federal Reserve (Fed) outlook after US President Donald Trump nominated former Fed Governor Kevin Warsh to succeed Fed Chair Jerome Powell when his term ends in May.

Investors view Kevin Warsh as a more institutional and policy-oriented choice than other contenders, reducing fears that monetary policy could be shaped by political pressure following Trump’s repeated demands for lower rates.

On the Canadian side, the S&P Global Manufacturing PMI rose to 50.4 in January from 48.6 previously, signalling a return to modest expansion.

Commenting on the release, Paul Smith, Economics Director at S&P Global Market Intelligence, said that “following a challenging 2025, PMI data suggested that Canada’s manufacturing sector started the new year on a more positive footing. Output stabilised after nearly a full year of continuous contraction, while confidence in the outlook improved and marginal jobs growth was recorded for the first time in 12 months.”

Meanwhile, the downside in the CAD is being reinforced by softer Oil prices, as Canada is one of the world’s largest crude exporters. West Texas Intermediate (WTI) is trading around $61.78 per barrel, down more than 5.5% on the day.

Attention now shifts to labour market releases due on Friday, with both the Nonfarm Payrolls (NFP) report and Canada’s employment figures set to steer near-term price action.

• The Japanese Yen depreciates as the latest Tokyo inflation data reduces expectations of a near-term rate hike in Japan.
• Fiscal concerns and political uncertainty weigh on the Japanese currency, despite lingering fears of official intervention.
• The US Dollar firms modestly, supporting USD/JPY, although doubts surrounding the Federal Reserve cap upside potential.

USD/JPY trades higher at the start of the week and hovers around 155.60 on Monday at the time of writing, up 0.55% on the day. The move reflects renewed weakness in the Japanese Yen (JPY), driven by reduced expectations of monetary tightening by the Bank of Japan (BoJ), combined with a moderate rebound in the US Dollar (USD).

The Japanese Yen remains under pressure following the release of weaker-than-expected inflation indicators in Tokyo. The Consumer Price Index (CPI) slowed sharply, pointing to easing underlying inflationary pressures and reducing the urgency for the Bank of Japan to raise interest rates in the near term. These figures reinforce the view that the central bank will remain cautious after its recent policy normalization, with markets now pushing the probability of another rate hike toward the spring.

Political factors are also adding to the fragility of the Japanese Yen. Expansionary economic proposals from Japanese Prime Minister Sanae Takaichi, along with uncertainty surrounding the snap election scheduled for Sunday, have revived concerns over fiscal sustainability. Investors fear that stronger parliamentary backing could encourage further tax cuts and additional stimulus measures, weighing on Japan’s fiscal credibility.

In this environment, the downside in the Japanese Yen is partially limited by fears of official intervention. Rumors of unusual rate checks and repeated warnings from the Ministry of Finance continue to instill caution among JPY sellers, helping to restrain the pace of depreciation for now.

In addition, global geopolitical and trade risks continue to underpin latent demand for safe-haven assets, which could eventually lend some support to the Japanese Yen.

On the US side, the US Dollar receives modest support. Recent macroeconomic data, particularly the strong rebound in the Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) released earlier in the day, reinforce the perception of a resilient US economy. This allows the Greenback to stabilize after a period of weakness, offering additional support to the USD/JPY pair.

Middle East trade is experiencing significant growth, projected to increase by 15% compared to 9% globally from 2021 to 2024. Asia is expected to dominate this trade corridor, expanding from USD 0.9 trillion in 2024 to USD 1.5 trillion by 2030. Additionally, GCC-Africa trade is anticipated to double to USD 260 billion by 2030, report Standard Chartered Bank analysts.

Rapid growth in Middle East trade

"Middle East (ME) trade is gaining rapidly, growing 15% vs 9% global growth in 2021-24 as supply chains fragment and reroute through the region."

"Asia is the dominant and most scalable trade corridor and looks set to expand from USD 0.9tn in 2024 to USD 1.5tn by 2030."

"Africa is the fastest-growing corridor from a low base; we project GCC-Africa trade will double to USD 260bn by 2030."

"Trade growth is increasingly import-led, with non-oil imports outpacing exports across major partners."

"GCC drives over 80% of ME trade, with the UAE scaling flows as the region’s hub and Saudi anchoring demand and industrial exports."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Gold stabilises after a brutal correction from record highs.
• Geopolitical tensions and institutional demand continue to underpin the broader uptrend.
• XAU/USD remains technically weak on the 4-hour chart, with price holding below both the 50- and 100-period SMAs.

Gold (XAU/USD) stabilises on Monday with dip-buying interest emerging after a sharp correction from last week’s surge to fresh all-time highs near $5,600. At the time of writing, XAU/USD trades around $4,705, recovering after an intraday slide of nearly 10% to over three-week lows near $4,402.

The precious metal suffered its largest intraday decline in decades on Friday, ending the day down 10.7%, as elevated volatility and thin liquidity triggered forced liquidations and heavy profit-taking at record levels.

Selling pressure intensified further as markets tilted toward a more hawkish monetary policy outlook after US President Donald Trump nominated former Federal Reserve (Fed) Governor Kevin Warsh as the next Fed Chair.

Despite the sharp correction, the broader uptrend in Gold remains intact. The macro backdrop stays supportive, with persistent geopolitical risks and economic uncertainties continuing to underpin demand. At the same time, robust institutional and investment flows remain a key source of support.

Looking ahead this week, a heavy slate of US labour market data is set to steer near-term price action, with the spotlight firmly on Friday’s Nonfarm Payrolls (NFP) report.

Market movers: Geopolitics, margin hikes and Fed signals in focus

• US manufacturing data surprised to the upside, with the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) jumping to 52.6 in January, well above the 48.5 forecast and up from 47.9 in December. At the same time, the S&P Global Manufacturing PMI edged higher to 52.4 from 51.9.
• The United States (US) government entered a partial shutdown on Saturday after a midnight funding deadline passed without approval from the US Congress for the 2026 budget. Disruptions are expected to be limited, as the House of Representatives is set to vote early next week on a deal backed by the US Senate.
• US-Iran tensions keep geopolitical risks in play, with Iran’s Supreme Leader Ayatollah Khamenei warning that any US attack would trigger a "regional war" after US President Donald Trump issued fresh warnings of potential military action over Iran’s nuclear programme.
• The CME Group is raising margin requirements on COMEX Gold and Silver futures due to heightened market volatility, with Gold margins set to rise to 8% from 6% and Silver margins to 15% from 11%. The changes take effect after the market closes on Monday. Higher margins mean traders must put up more capital to hold positions, which can dampen speculative activity in precious metals.
• The nomination of former Fed Governor Kevin Warsh as the next Fed Chair has also helped ease some concerns surrounding the ongoing debate over the Fed's independence. Investors broadly view Warsh as a more institutional, policy-insider candidate compared with other potential contenders.
• The Fed kept its benchmark interest rate unchanged at 3.50%-3.75% last week. Fed Governor Christopher Waller said he dissented in favour of a 25-basis-point rate cut, arguing that policy remains too restrictive and should move closer to a neutral level near 3%. In contrast, Atlanta Fed President Raphael Bostic said the central bank should remain patient and needs clearer evidence that inflation is returning to its 2% target.

Technical analysis: XAU/USD remains bearish below moving averages

On the 4-hour chart, the near-term technical outlook for XAU/USD remains bearish. The 50-period Simple Moving Average (SMA) has turned lower and, while it still sits above the 100-period SMA, price action remains below both moving averages, keeping sellers firmly in control.

The Relative Strength Index (RSI) stands near 38, well below the 50 midline, confirming persistent bearish momentum. The 100-period SMA near $4,850 acts as nearby dynamic resistance.

Trend strength builds as the Average Directional Index (ADX) rises to 43.51, reinforcing a sustained downside phase. A sustained 4-hour close above the 100-period SMA would help ease immediate downside pressure and could open the door for a corrective rebound toward the 50-period SMA at $5,057.68.

As long as price fails to reclaim these moving averages, the path of least resistance remains to the downside, with momentum still tilted in favour of sellers.

(The technical analysis of this story was written with the help of an AI tool.)

• GBP/USD falls by around 0.17% as the US Dollar extends gains for a second day following the sharp precious metals selloff.
• Trump’s nomination of Kevin Warsh as the next Fed Chair reinforces expectations of a firmer, less-dovish Fed stance.
• US ISM Manufacturing PMI jumps into expansion at 52.6, boosting Treasury yields and Dollar demand.

The Pound Sterling (GBP) dives some 0.17% on Monday as the US Dollar (USD) extends its gains to two straight days, following the precious metals rout that pushed Gold prices down by over $1,000 after reaching a record high near $5,600. GBP/USD trades at 1.3662 after reaching a daily high of 1.3715.

Sterling weakens ahead of the BoE meeting as markets reprice a less-dovish Fed and US data beats expectations

Last Friday, US President Donald Trump nominated Kevin Warsh to be the new Fed Chair since June 2026. After the announcement, markets priced in a less 'dovish' US central bank as Warsh, a former governor at the Fed, was usually hawkish in his previous stint.

Data-wise, the US economic docket featured S&P Global Manufacturing PMI for January, showing an expansion in the sector. The ISM Manufacturing PMI crushed forecasts of a 48.5 reading and expanded by 52.6 in January, up from December’s 47.9 contraction.

In the UK, traders' focus is on the Bank of England’s (BoE) monetary policy decision, in which the central bank is expected to hold the Bank Rate steady at 3.75% on Thursday. Market participants’ attention will be on the vote split, as members have been divided during the last couple of meetings.

Worth noting that although the UK jobs market had shown signs of weakness, inflation remains the highest among the G7 industrialized countries. Therefore, the BoE could refrain from supporting the labor market.

S&P Global reported that manufacturing activity in January in the country improved the most since August 2024, indicating the economy is picking up. The Purchasers Managers Index (PMI) rose from 51.6 to 51.8, exceeding estimates.

Ahead in the week, the UK docket will feature the BoE’s monetary policy and speeches by BoE members. Across the pond, Fed officials will grab the headlines, along with Services PMI data by S&P Global and the ISM, jobless claims and January’s Nonfarm Payrolls report.

GBP/USD Price Forecast: Technical outlook

After clearing 1.3700 support, GBP/USD is poised to consolidate within the 1.3600-1.3700 area. Bullish momentum is fading as depicted by the Relative Strength Index (RSI) aiming towards its neutral level.

For a bullish continuation, buyers must clear 1.3700 and challenge 1.3750. On further strength, 1.3800 lies overhead. Conversely, if GBP/USD tumbles below 1.3650, it could exacerbate the drop to 1.3600. A breach of the latter will expose the 20-day SMA at 1.3538.

• US ISM Manufacturing PMI rose into expansion territory in January.
• USD Index stays in positive territory near 97.50.

The business activity in the US manufacturing sector expanded in January, with the Institute for Supply Management's (ISM) Manufacturing Purchasing Managers' Index (PMI) improving to 52.6 from 47.9 in December. This reading came in better than the market expectation of 48.5.

Other details of the publication showed that the Employment Index of the PMI survey rose to 48.1 from 44.9 in this period, while the New Orders Index jumped to 57.1 from 47.7. Finally, the Prices Paid Index, also known as the inflation component, edged higher to 59 from 58.5.

Assessing the findings of the survey, "in January, US manufacturing activity returned to expansion territory, with improvements in all five subindexes that make up the PMI, though the Employment and Inventories indexes still remain in contraction," said Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.

"Although these are positive signs for the start of the year, they are tempered by commentary citing that January is a reorder month after the holidays, and some buying appears to be to get ahead of expected price increases due to ongoing tariff issues," Spence added.

Market reaction to US ISM Manufacturing PMI data

The US Dollar (USD) Index gains traction in the American session and was last seen rising 0.35% on the day at 97.50.