Forex News
- USD/CAD struggles to attract any meaningful buyers and hangs near one-and-a-half-month low.
- Sliding crude oil prices undermine the Loonie, while hopes for Iran diplomacy weigh on the USD.
- Traders look to US ISM Manufacturing PMI ahead of Friday’s jobs reports from the US and Canada.
The USD/CAD pair struggles to capitalize on a modest intraday uptick and trades around the 1.3965 area during the early European session amid a combination of diverging forces. Crude oil prices kick off the new week on a downbeat note, which undermines the commodity-linked Loonie and supports spot prices. However, receding safe-haven demand weighs on the USD and keeps the currency pair close to its lowest level since September 16, touched on Friday.
Iranian negotiators reportedly held talks with Qatari mediators for the third consecutive day on Sunday to advance a deal to end the US-Israeli war on Iran. In further developments, Iran has proposed a two-day (48-hour) plan to reopen the Strait of Hormuz, provided that the US fulfills a set of conditions. Moreover, US President Donald Trump said that negotiations with Iran were going fine and that Iran wanted a deal. Adding to this, the absence of any meaningful military escalation over the weekend prompts some profit-taking around crude oil prices following the recent rally to the highest level since mid-May.
This, to a larger extent, overshadows the Bank of Canada's (BoC) abrupt shift toward monetary tightening and acts as a headwind for on the Canadian Dollar (CAD). The USD, on the other hand, is pressured by the optimism over a potential diplomatic resolution to conflicts in the Middle East. The geopolitical risk premium, however, remains in play as Trump has not ruled out further military action after the November 3 midterm elections. Moreover, Iran’s Supreme Leader, Mojtaba Khamenei, ordered his top military commanders to prepare for renewed confrontation and expand Tehran’s options for retaliation.
Oil risk skewed to the upside as Strait of Hormuz tensions linger
Analysts at MUFG/BTMU caution that, from a market perspective, “the distribution of oil risks remains asymmetric.” They acknowledge that successful diplomacy could “compress some geopolitical premium,” but warn that “renewed military escalation or further disruption around the Strait of Hormuz could generate a sharper upside move,” underscoring the vulnerability of energy importers to any fresh spike in Brent prices.
Furthermore, traders have been pricing in around a 75% chance that the US Federal Reserve (Fed) will raise borrowing costs again in December, which could act as a tailwind for the USD and offer some support to the USD/CAD pair. Market participants might also opt to move to the sidelines ahead of this week's important US macro releases scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later today. The focus, however, will be on the closely watched monthly employment details from Canada and the US, popularly known as the Nonfarm Payrolls (NFP) report on Friday.
USD/CAD daily chart
Technical Analysis
The USD/CAD pair keeps a bearish near-term tone below the 100-day Simple Moving Average (SMA) at 1.4047. Moreover, spot prices hover around the 61.8% Fibonacci retracement at 1.3969, while the dense cluster formed by the 50.0% retracement at 1.4033 and the 100-day SMA overhead suggests rallies remain vulnerable to selling interest.
Any recovery would first need to clear the 50.0% Fibo. and the nearby 100-day SMA at 1.4047, with further resistance then expected at the 38.2% retracement around 1.4096 and the 23.6% level at 1.4175 before the cycle high near 1.4302 comes into view. On the downside, initial support sits at the 78.6% level at 1.3878 ahead of the recent swing low near 1.3763.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- The British Pound is up against its major peers ahead of BoE’s policy decision on Thursday.
- The BoE is highly anticipated to hike interest rates by 25 bps to 4%.
- Markets expect Democrats a 70-72% chance of taking both the House and the Senate.
The British Pound (GBP) is up against a majority of its currency peers, trading 0.3% higher to near 1.3430 vs. the US Dollar (USD) at the start of the week. The British currency trades higher, while investors keenly await the Bank of England’s (BoE) monetary policy announcement on Thursday.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.49% | -0.27% | 0.05% | -0.08% | 0.10% | -0.02% | -0.58% | |
| EUR | 0.49% | 0.22% | 0.51% | 0.40% | 0.59% | 0.47% | -0.06% | |
| GBP | 0.27% | -0.22% | 0.32% | 0.18% | 0.37% | 0.25% | -0.27% | |
| JPY | -0.05% | -0.51% | -0.32% | -0.11% | 0.06% | -0.06% | -0.61% | |
| CAD | 0.08% | -0.40% | -0.18% | 0.11% | 0.19% | 0.06% | -0.46% | |
| AUD | -0.10% | -0.59% | -0.37% | -0.06% | -0.19% | -0.12% | -0.65% | |
| NZD | 0.02% | -0.47% | -0.25% | 0.06% | -0.06% | 0.12% | -0.52% | |
| CHF | 0.58% | 0.06% | 0.27% | 0.61% | 0.46% | 0.65% | 0.52% |
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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Sterling holds firm as markets see BoE hike to 4.00% as a done deal
Analysts at ING note that Sterling is “trading reasonably well,” supported by the market’s conviction that elevated energy costs leave the BoE with “no alternative but to hike rates on Thursday.” In their view, “a 25bp rate hike to 4.00% looks like a done deal,” reinforcing the constructive tone around the Pound ahead of the policy decision.
With financial markets remaining confident that the BoE will hike interest rates, investors might pay close attention to the vote split and the monetary policy outlook.
Meanwhile, the US Dollar faces selling pressure ahead of United States (US) midterm elections on Tuesday. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.3% down to near 101.65.
Dollar outlook clouded as US midterm odds point to Democrat sweep
ING’s Chris Turner flags the US midterm elections as the key event risk for FX this week, noting that betting markets now give the Democrats a “70-72% chance of taking both the House and the Senate.” He argues that “one could make the case that the Dollar should come lower on such an outcome,” as a Democrat clean sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” Against that backdrop, Turner suggests investors will be weighing these political risks against the still-supportive mix of strong US growth, above-target inflation and ongoing Fed tightening for the Dollar and DXY around the 102.00 area.
GBP/USD Technical Analysis
In the daily chart, GBP/USD trades around 1.3430, retaining a bullish near-term bias as spot holds above the 9-day Exponential Moving Average (EMA) at 1.3366 and the 50.0% Fibonacci retracement at 1.3408 of the 1.3138–1.3677 leg. The Relative Strength Index (14) stands near 60, indicating firm positive momentum that reinforces the upside tone while stopping short of overbought conditions.
On the topside, immediate resistance is located at the 61.8% Fibonacci retracement at 1.3471, ahead of the 78.6% level at 1.3562, with the cycle high at 1.3677 acting as a stronger barrier if bulls extend the advance. On the downside, initial support is seen at the 50.0% retracement at 1.3408, followed by the 9-day EMA at 1.3366 and the 38.2% level at 1.3344, while deeper pullbacks would expose the 23.6% retracement at 1.3265 and the structural anchor near 1.3138.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
BoE Interest Rate Decision
The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.
Read more.Next release: Thu Nov 05, 2026 12:00
Frequency: Irregular
Consensus: -
Previous: 3.75%
Source: Bank of England
- SVME – PMI rose to 56.7 in October, against expectations of remaining at 55.3.
- The US Dollar fell as Middle East diplomatic efforts reduced safe-haven demand, despite remaining US-Iran conflict fears.
- Traders price in a 75% chance of a December rate hike following resilient US economic and inflation data.
USD/CHF depreciates after posting minor gains in the previous trading day, hovering around 0.8220 during the European hours on Monday. The pair remains subdued as the Swiss Franc (CHF) holds gains following the release of domestic economic data.
SVME - Purchasing Managers' Index rose to 56.7 in October, against expectations of remaining at 55.3. Swiss Real Retail Sales came in at 1.6% year-over-year growth in September, from the previous 3.9% (revised from 3.2%). Market expectations were 3%.
The USD/CHF pair depreciates as the US Dollar (USD) loses ground amid easing safe-haven demand, driven by ongoing diplomatic efforts to end the Middle East conflict despite lingering fears of renewed US military action against Iran. Qatari and Iranian officials continued discussions for a third consecutive day, working toward an agreement to end the war ahead of the US midterm elections.
However, the US Dollar could regain ground on rising expectations for a Federal Reserve rate hike. According to the CME FedWatch Tool, traders are pricing in roughly a 75% chance of a December rate increase, boosted by recent US macroeconomic data pointing to economic resilience and persistent inflation.
Traders await key upcoming events, including the US Nonfarm Payrolls (NFP) report and ISM manufacturing and services data. Remarks from several Federal Reserve officials scheduled throughout the week are also expected to offer further guidance on the central bank's monetary policy path.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
ING strategist Frantisek Taborsky outlines a busy week for Central and Eastern European (CEE) markets, with PMI, inflation and industrial data across Turkey, Hungary and the Czech Republic, plus policy decisions from Poland and the Czech National Bank. He expects NBP to keep rates at 3.75% and delay hikes until 2027, sees CNB likely hiking 25bp, and maintains a dovish bias as rising energy prices and a stronger Dollar weigh on regional FX.
Dovish CEE central banks versus stronger Dollar
"Trading on Friday saw a return of risk-off sentiment, following a brief period of relief after the Fed and European Central Bank meetings. The combination of rising energy prices and a stronger dollar globally, alongside generally dovish central banks within the CEE region, will continue to exert pressure on local currencies."
"Tomorrow, we will see Turkey’s inflation figures for October. Our estimates suggest a monthly acceleration from 1.8% to 2.4%, while the year-on-year figure is expected to tick lower to 29.6%."
"On Wednesday, Hungary’s industrial production data and the Czech Republic’s October inflation figures will be published. We anticipate an acceleration in headline inflation from 2.5% to 2.6%, and a further rise in core inflation from 3.1% to 3.3%. The National Bank of Poland is also expected to keep rates unchanged at 3.75% and present a new forecast. We do not anticipate the first rate hike until the first quarter of 2027."
"On Thursday, the Czech National Bank will follow, likely raising rates by another 25bp to 4.00% while also presenting a new forecast."
"In line with our expectations, EUR/CZK has returned to the 24.300–350 range, which we consider fair for the time being. Although we anticipate a hawkish stance from the CNB, the bar is high given that 100bp of tightening is already priced in and the koruna has a tendency to weaken slightly following CNB meetings. We could see the pair move slightly above 24.350 again."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- AUD/USD extends losses, nearing the 0.7000 area, down from last week's 0.7068 high.
- Mixed Australian data and upbeat Chinese manufacturing figures have failed to lift the Aussie.
- On Tuesday, the RBA is widely expected to deliver the fifth interest rate hike of the year.
The Australian Dollar (AUD) is portraying one of the weakest performances among major currencies on Monday, and dips further against the US Dollar (USD), amid mixed Australian macroeconomic figures and bright Chinese manufacturing activity figures. The AUD/USD pair is trading at 0.7015 at the European session opening, nearing the bottom of the last two weeks’ trading range in the 0.7000 area.
Australian macroeconomic data released earlier on Monday showed mixed results. The S&P Global Manufacturing Purchasing Managers' Index (PMI) accelerated its contraction, to 49.6 in October against expectations of a steady 49.7 reading, while, on the positive side, Building Permits bounced up 5.1% in September, well beyond the 2.1% expected by the market and reversing August’s 5.2% fall.
Apart from that, China’s RantingDog Manufacturing PMI revealed that the sector’s activity grew at a 52.0 pace in October, down from September's 52.1, but above the 51.6 reading expected by the market.
RBA meeting seen as pivotal as Aussie faces worsening inflation outlook
In Australia, the highlight of the week is the Reserve Bank of Australia's (RBA) monetary policy decision, due on Tuesday. Analysts at Rabobank note that the central bank is “widely tipped to deliver another 25bp rate rise,” which would “mark the fifth rate rise this year and take the cash rate target up to 4.85%.”
Rabobank also underscores the shift in the inflation narrative, pointing out that RBA Deputy Governor Hauser recently remarked that the Aussie inflation outlook has become “materially worse” and cautioned that, with “pending events in the Middle East this week, it might get even worse.”
In the US, the main focus is on Tuesday's midterm elections, which are expected to shift the balance of power in Congress and maybe even in the Senate. Such an outcome is likely to lead to a gridlock on the debt ceiling in 2027 and might also put a brake on data center building plans, at a time when clouds are casting over the AI sector.
Before that, the US ISM Services PMI is expected to show strong growth, to support the US economic exceptionalism rhetoric and strengthen the case for a Federal Reserve interest rate hike in December.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
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