Forex News
Standard Chartered argues that Europe’s political balance could shift to the right in 2027, with key elections in France, Spain, Italy and Poland. The bank highlights France’s presidential race as most critical, warning an RN victory would be market negative. It also notes potential conservative and populist-right gains could reshape EU institutions and constrain climate, migration and trade policy.
EU institutions face rightward pressure
"Next year has the potential to deliver a material shift rightwards in the EU’s political centre of gravity."
"Given its political and economic weight in Europe, the stakes are highest in France where presidential elections (April 2027) could deliver a victory for the far-right Rassemblement National (RN)."
"The most visible impact of a pivot to the right would be in the European Council, where a culture of consensus-building would create room for far-right leaders to shape negotiations and threaten to use national vetoes on areas requiring unanimity."
"In the Parliament, this could increase pressure on the centre-right European People’s Party (EPP) to work more closely with far-right groups, while at the Commission level, a more right-wing Council could limit what President von der Leyen views as politically achievable."
"Right-wing and far-right governments will not necessarily agree on what to implement or change from a policy perspective, so their impact may be more acutely felt in terms of their capacity to block or dilute the pre-existing EU agenda, creating political paralysis in certain areas."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CAD extends its rally as Fed-BoC monetary policy divergence favours the US Dollar.
- Canadian Retail Sales fall in July, adding to pressure on the Canadian Dollar.
- Resilient US data and hawkish Fed comments keep another interest-rate hike on the table.
USD/CAD extends its advance on Thursday, climbing to its highest level since mid-July. The pair has posted only one daily decline over the past 12 trading days, reflecting the diverging monetary policy outlooks of the Federal Reserve (Fed) and the Bank of Canada (BoC). At the time of writing, USD/CAD trades around 1.4113, up nearly 2% so far this month.
Canadian Dollar struggles as US-Canada yield gap widens
Canadian Retail Sales data offered little support to the Canadian Dollar (CAD). Headline sales fell 0.7% MoM in July, slightly better than the 0.8% drop expected, while sales excluding automobiles also declined 0.7%
The recent USD/CAD rally is largely driven by the widening gap between short-term US and Canadian bond yields. The two-year US Treasury yield trades around 4.89%, slightly below Wednesday’s peak of 4.94%, its highest level since 2004. By comparison, Canada’s two-year government bond yield stands near 3.40%, leaving a gap of almost 150 basis points in favour of the US Dollar (USD).
US Treasury yields are rising across the curve as traders see a growing chance that the Fed will raise interest rates again later this year. The central bank delivered a 25-basis-point (bps) increase last week, lifting the federal funds rate to 3.75%-4.00%.
The hawkish shift has fuelled broad demand for the Greenback. The US Dollar Index (DXY), which tracks the currency against a basket of six major peers, trades around 101.37, its highest level since July 29.
Recent US economic data has strengthened the case for additional tightening. US Initial Jobless Claims fell slightly to 197K in the week ending September 19 from 198K previously and came in below market expectations of 201K. The S&P Global Composite Purchasing Managers’ Index (PMI) also climbed to a five-year high of 58.4 in September from 56.0 in August.
Fed officials have kept another rate hike on the table as inflation stays above the central bank’s 2% target. New York Fed President John Williams said, “We need to get inflation back to target in a timely manner,” adding that it is “reasonable to see another rate hike by the end of the year.” The CME FedWatch Tool places the probability of an October rate increase at around 65%, up from 55% a week ago.
Steady BoC policy outweighs support from higher Oil prices
In contrast, the BoC kept its policy rate unchanged at 2.25% for a seventh consecutive meeting earlier this month. The central bank noted that there was little evidence of higher energy prices spreading into broader inflation, with inflation excluding gasoline at 2.2% and core measures close to 2% in July.
The BoC acknowledged that upside inflation risks have increased but also warned that new US tariffs cloud the growth outlook. Interest-rate expectations are also outweighing the support that the commodity-linked Canadian Dollar would typically receive from higher Oil prices. West Texas Intermediate (WTI) Oil trades around $95, up nearly 11% so far this month.
(This story was corrected on September 24 at 16:55 GMT to replace the previous US Initial Jobless Claims reading of 196K with the revised figure of 198K.)
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.19% | 0.38% | 0.32% | 0.38% | 0.35% | 0.50% | |
| EUR | -0.13% | 0.06% | 0.25% | 0.15% | 0.24% | 0.21% | 0.35% | |
| GBP | -0.19% | -0.06% | 0.19% | 0.10% | 0.18% | 0.15% | 0.30% | |
| JPY | -0.38% | -0.25% | -0.19% | -0.10% | -0.02% | -0.08% | 0.07% | |
| CAD | -0.32% | -0.15% | -0.10% | 0.10% | 0.07% | 0.02% | 0.18% | |
| AUD | -0.38% | -0.24% | -0.18% | 0.02% | -0.07% | -0.05% | 0.11% | |
| NZD | -0.35% | -0.21% | -0.15% | 0.08% | -0.02% | 0.05% | 0.18% | |
| CHF | -0.50% | -0.35% | -0.30% | -0.07% | -0.18% | -0.11% | -0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Commerzbank’s Chief Economist Dr. Jörg Krämer notes that leading indicators such as the Ifo business climate index and PMIs have surprised to the upside, showing the German economy’s resilience to high energy prices and the Iran War. Nevertheless, he forecasts only a moderate recovery, with German GDP growth of 1.2% in 2026, constrained by weak corporate investment and exports.
Resilience offsets energy and trade shocks
"The ifo business climate index has risen surprisingly sharply (from 88.8 to 89.9), just like yesterday’s purchasing managers’ index. Apparently, companies have shaken off the recent massive surge in energy prices. The German economy is more resilient than expected."
"However, we expect only a moderate recovery (1.2% for 2026). Due to the lack of far-reaching reforms, the battered competitiveness of Germany is not improving decisively, which is why companies will remain reluctant to invest domestically. In addition, exports are suffering from weak exports to China and from Trump’s tariffs."
"Not only the ifo business climate index, but also other leading indicators such as the PMIs and incoming orders have delivered positive surprises in recent months. It is mainly for this reason that two weeks ago we raised our 2026 growth forecast for Germany from 1.0% to 1.2%."
"However, we still expect a weak recovery. Since early 2024, when German GDP passed its trough, corporate investment has declined. The absence of profound reforms to improve Germany’s battered competitiveness argues against corporate investment rebounding strongly, as is usually the case in upswings."
"As a result, the economic recovery depends far more than usual on rising government spending on consumption (increasing public-sector employment, healthcare) and investment (including defence). The German economy is still a long way from a self-sustaining upswing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CNH rises for a third session to an early-September high as Xi visits the White House.
- Xi offers no tariff news, and the trade truce now runs only to January 10.
China's paramount leader Xi Jinping's remarks at the White House ran to 21 lines on the wires, covering friendship, artificial intelligence (AI), counter-narcotics work and fair treatment for Chinese firms, and none of them mentioned tariffs. The only figure in them was 100K young Americans invited to visit China, over a longer stretch than the trade truce now covers.
US Treasury Secretary Bessent said on Wednesday that the truce struck in Busan, due to lapse on November 10, now runs to January 10, short of the six months or more many had expected. The truce keeps tariffs on Chinese goods from going back up, so a two-month extension gives exporters holding Dollars less reason to switch them into Yuan before January.
The People's Bank of China (PBoC) has also stopped firming its daily midpoint, the rate the onshore Yuan can trade 2% either side of, after ten sessions in a row. The Dollar is at its highest in nearly two months on bets the Fed raises rates again.
USD/CNH has risen three sessions in a row from the lows near 6.6900 on Monday and Tuesday, where the Yuan was at its strongest in three and a half years. Wednesday's bar, on the truce extension, was the largest of the three. The pair has taken back all of the slide that began on September 17 and reached 6.7200, its highest since early September. It's still below its 50-day Exponential Moving Average (EMA), near 6.7300, which it has traded under since the second week of July. The daily Stochastic Relative Strength Index (Stoch RSI), a momentum gauge, has been flat just above the middle of its range since mid-September and hasn't turned up with price.
Xi Jingping highlights
- Happy to visit a 'beautiful' US
- On behalf of Chinese people, I express my greetings to US 250th founding anniversary
- China, US are both great countries, great peoples
- I'm here to pass on friendship, expand cooperation
- China, US shoulder responsibility to promote human progress
- Willing to work with Trump to steer the ship of China-US ties
- We should strengthen communication
- Candid, in-depth, sustained dialogue can promote understanding, mutual trust
- We encourage exchanges on diplomacy, trade and economy, law enforcement
- Trump and I have built personal rapport
- We should work together in good faith
- There is broad space for cooperation
- China's door is open, welcomes US firms to invest in China
- China, US are both AI powers
- Willing to step up counter-narcotics, law enforcement cooperation
- Hope Chinese firms are treated fairly in US
- We have capability, responsibility to develop, manage AI for good
- We need to co-exist peacefully
- Competition should be positive, with boundaries
- Two militaries should maintain regular dialogue
- China to invite 100,000 US youth to visit China in next 5 years
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
ING’s James Knightley and Coco Zhang argue that US manufacturing is finally reviving after years of stagnation, helped by reshoring narratives, AI-driven investment and defence spending. They forecast US manufacturing volume growth of 1.5–2% per year over the next three years, but stress a growing split: advanced, highly automated sectors expand, while traditional, labour‑intensive industries continue to shrink.
Advanced sectors drive uneven recovery
"Nonetheless, the sector has shown genuine signs of a revival over the past year. The ISM production index has moved from sub-50 contraction territory to signalling robust growth ahead. Below, we look at what is driving this turnaround and how it could evolve."
"Business surveys point to strong order books, and we see this supporting manufacturing’s ongoing revival. Our volume growth forecast for US manufacturing of 1.5-2% per year over the next three years may not seem like much, but it should be seen in the context of the sluggish activity experienced over the past 20 years. This headline forecast also masks increased bifurcation, with advanced manufacturing growing rapidly while more traditional sectors look set to retrench further."
"Highly automated, high-value-added sectors at the forefront of the AI/technology revolution are seen as national champions by the government and are able to absorb the relatively high wages on offer in the US. The desire to incorporate AI advances should, in theory, drive advances in productivity-enhancing initiatives that further support innovation. As such, pharma, tech, transport & aerospace, electrical and power-related sectors should continue to grow robustly."
"Lower value-added production, where labour costs make up a greater share of the overall cost base of production, will continue to struggle unless it can garner a 'made in America' premium. Heavy industry, such as steel, is likely to be somewhere in the middle. While costs have risen, they have risen more elsewhere."
"Tariffs and energy security do boost the attractiveness of manufacturing in the US. But so does US economic growth continuing to outperform other key markets. Between 2023 and 2026, the US economy has grown an average of 2.5% year-on-year in volume terms versus 0.9% in Europe."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad highlights that the Dollar is advancing broadly as a hawkish Federal Reserve stance combines with strong US economic outperformance. September PMI data significantly beat other major economies, while higher real Treasury yields reflect robust private sector growth. BBH also notes extended US-China trade truce, keeping geopolitical risk in focus for USD performance.
Fed hawkishness and growth back USD
"USD is powering forward against most major currencies. A hawkish Fed and widening US economic growth outperformance suggest USD can keep flexing its muscle. Yesterday, Fed Governor Michael Barr’s warned that “further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”"
"Today, New York Fed President John Williams highlighted the US economy shows “remarkable resilience”, inflation remains the “big challenge”, and “another rate hike may be appropriate by the end of the year.” Barr and Williams’ comments strengthen the case for additional Fed funds rate hikes."
"In parallel, the US September PMI surprised to the upside, outpacing the Eurozone, UK, and Japan. The US composite PMI increased to a 62-month high at 58.4 (consensus: 55.3) vs. 56.0 in August. The details showed services growth quickened to a 59-month high, manufacturing rose to a 53-month high, and price pressures intensified."
"The same forces lifting USD are driving Treasury yields higher and contributing to the global bond market selloff. US 10-year Treasury yields surged to 5.14%, the highest level since July 2007. The breakdown shows 10-year breakeven inflation rates edged up a bit on firmer crude oil prices."
"The geopolitical focus is on the one-day summit between Chinese President Xi Jinping and President Donald Trump. Treasury Secretary Scott Bessent confirmed yesterday that both countries agreed to extend their trade war truce, which was set to expire on November 10, until January 10. Still, Bessent questioned whether a bigger trade deal with China can be done."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Philadelphia Federal Reserve (Fed) President Anna Paulson crossed the wires on Thursday, signaling that further rate hikes may be needed to lower inflation. She acknowledged that the rate hike in September helped to “move policy to a better inflation-fighting posture.”
Paulson, who began her stint as the new Philadelphia Fed President in July 2025, leaned dovish but later shifted her stance, saying, “I will support doing what's needed to get inflation back to 2%.”
Key highlights:
The US central bank may need to raise interest rates again to lower inflation
September rate hike helped move policy to better inflation-fighting posture
I will support doing what's needed to get inflation back to 2%
The best you can say about inflation is that it has not gotten worse
The inflation balance of risks shifted ahead of the September policy meeting
The AI buildout is helping drive inflation pressures
Underlying inflation remains stubbornly high
The economy is resilient, and showing signs of increased momentum
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.19% | 0.35% | 0.24% | 0.26% | 0.28% | 0.44% | |
| EUR | -0.06% | 0.12% | 0.25% | 0.15% | 0.20% | 0.20% | 0.36% | |
| GBP | -0.19% | -0.12% | 0.13% | 0.03% | 0.07% | 0.07% | 0.24% | |
| JPY | -0.35% | -0.25% | -0.13% | -0.12% | -0.08% | -0.09% | 0.08% | |
| CAD | -0.24% | -0.15% | -0.03% | 0.12% | 0.03% | 0.02% | 0.20% | |
| AUD | -0.26% | -0.20% | -0.07% | 0.08% | -0.03% | 0.00% | 0.17% | |
| NZD | -0.28% | -0.20% | -0.07% | 0.09% | -0.02% | -0.00% | 0.20% | |
| CHF | -0.44% | -0.36% | -0.24% | -0.08% | -0.20% | -0.17% | -0.20% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Forex Market News
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