Forex News
- USD/CAD gains ground to around 1.4275 in Tuesday’s early European session.
- Oil prices fall as rising crude exports from G7 nations' release of oil added to supplies, weighing on Canadian Dollar.
- Expectations of a Fed rate hike in October eased after data showed US job growth slowed more than expected in September.
The USD/CAD pair gathers strength to near 1.4275 during the early European trading hours on Tuesday. Falling crude oil prices drag the commodity-linked Canadian Dollar (CAD) lower against the US Dollar (USD). Canada’s Ivey Purchasing Managers Index (PMI) data is due later on Tuesday.
The Group of Seven nations (G7) on Friday agreed to release 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from energy export restrictions after pressure from US President Donald Trump.
The release will add to Middle Eastern crude exports, which climbed above pre-war levels in four of the seven days of the final week of September, data showed on Monday. It is worth noting that Canada is a major oil-exporting country, and low crude oil prices generally have a negative impact on the Loonie.
On the other hand, lower bets of a Federal Reserve (Fed) rate hike this month could undermine the Greenback. The US Bureau of Labor Statistics (BLS) revealed on Friday that the US Nonfarm Payrolls (NFP) rose by 29K in September, versus a rise of 133K prior, below the market consensus of 90K. The Unemployment Rate climbed to 4.2% in September from 4.1% in August.
Markets are now pricing in nearly a 22.7% probability that the Fed will raise benchmark borrowing costs at its October policy meeting, according to the CME FedWatch tool.
Canada jobs data seen soft as BoC hike expectations leave Dollar exposed
Strategists at Brown Brothers Harriman note that attention will focus on Canada’s September labor force survey due Friday, with the economy expected to add “just +5.0k jobs after losing -41.7k jobs in August.” They point out that the “unemployment rate is seen rising 0.1ppt to 6.5% on an unchanged participation rate of 65.0%, pointing to weak labor demand,” underscoring a softer tone in the labor market.
Against this backdrop, BBH argues that “BoC rate hike pricing (100bps in the next twelve months) looks too aggressive and leaves CAD vulnerable to a dovish repricing.” The bank stresses that “Canada core inflation is near the banks’ 2% target and indicators point to continued excess supply in the economy,” suggesting limited justification for such an aggressive tightening path and reinforcing the risk of Canadian Dollar weakness if expectations are scaled back.
Logan’s hawkish tilt lifts Fed expectations and supports the Dollar
Fed’s Logan speech registers a notably hawkish tone, with a 9.2/10 FXS Speechtracker score compared to the established baseline of 8.1/10, underscoring a stronger inclination toward tighter policy. The emphasis on higher yields reflecting both increased term premiums and expectations of higher interest rates, alongside calls for at least 50 bps more in rate hikes and several additional moves, signals a clear preference for further tightening despite acknowledging uncertainty about the terminal rate. This combination of stronger economic expansion, a well-balanced labor market, and a renewed push to “revive price stability” reinforces a policy stance that is modestly tight but biased toward additional hikes, a backdrop that is typically supportive for the Dollar and a headwind for the Euro and Yen.
The FXS Fed Sentiment Index rises by 1.68 points to 136.59, confirming a deeper move into hawkish territory well above the neutral 100 threshold and aligning with the elevated FXS Speechtracker reading. This upward shift in the FXS Fed Sentiment Index reflects markets internalizing Logan’s message that without higher rates, inflation will not return to the Fed’s 2% target, thereby reinforcing expectations for a more prolonged period of restrictive policy.
Technical Analysis: USD/CAD retains a positive tone amid overbought conditions
In the daily chart, USD/CAD extends its advance well above the 20-day simple moving average (SMA) and the 100-day SMA, which reinforces a bullish near-term bias. Price is pressing into the upper area of the Bollinger envelope, while the Relative Strength Index (14) at 78.8 signals overbought conditions and hints that upside momentum could be stretched at current levels.
On the downside, initial support emerges at the Bollinger middle band around 1.4070, followed by the 100-day SMA at 1.4005, where a deeper pullback would be expected to attract fresh buying interest in the prevailing uptrend. Further below, the lower Bollinger band at 1.3775 stands as a more distant structural floor. On the topside, the immediate resistance level is the Bollinger upper band at 1.4365, a break of which would open the way for an extension of the bullish leg, though overbought readings warn of increasing risk of consolidation or a corrective setback before any sustained move higher.
(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.
Germany's Factory Orders dropped in August, suggesting that the country’s manufacturing sector activity lost momentum, according to the official data published by the Federal Statistics Office on Tuesday.
Over the month, contracts for goods ‘Made in Germany’ fell by 10.6% in August after rising by 3.2% in July (revised from 2.5%). Data missed the estimated 1.0% decrease.
Germany’s Factory Orders increased by 2.7% year-over-year (YoY) in August, as against the previous rise of 14.0% (revised from 13.1%).
Market reaction
The Euro (EUR) edges slightly lower in an immediate reaction to Germany’s Factory Orders data. As of writing, the EUR/USD pair is down 0.10% on the day at 1.1212.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- WTI stages a modest bounce from the vicinity of a four-week low, though it lacks bullish conviction.
- Easing supply concerns counter geopolitical uncertainties and cap the upside for the black liquid.
- The mixed technical setup warrants caution before placing directional bets around the commodity.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – edges higher during the Asian session on Tuesday, reclaiming the $89.00 mark and snapping a two-day winning streak. The black liquid, however, remains close to a four-week low, touched last Friday, amid mixed fundamental cues.
The geopolitical risk premium remains in play amid the risk of a further escalation of tensions in the Middle East, which, in turn, offers some support to crude oil prices. That said, resilient Middle Eastern crude exports, along with a G7 emergency stockpile release, have eased supply concerns and might cap any meaningful upside for the commodity.
From a technical perspective, crude oil prices now seem to have found acceptance below the 200-period Simple Moving Average (SMA) on the 4-hour chart. However, some follow-through weakness below the 38.2% Fibonacci retracement of the July-September upswing is needed to back the case for further losses amid mixed oscillators on the said chart.
The Moving Average Convergence Divergence (MACD) indicator remains marginally negative, and the Relative Strength Index (RSI) around 46 hints at subdued, consolidative momentum rather than a decisive recovery. Hence, the 200-period SMA at $90.60 might continue to act as an immediate hurdle ahead of the 23.6% Fibo. retracement at $93.62.
The cycle high anchor near $101.85 marks a distant bullish objective that is unlikely to be challenged unless crude oil prices can reclaim and hold above the intermediate resistance band. Meanwhile, immediate support is located at the 38.2% retracement at $88.52, with deeper levels at the 50.0% level near $84.40 and the 61.8% Fibo. at $80.29 if selling pressure extends.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI 4-hour chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- AUD/JPY gathers strength to around 110.20 in Tuesday’s early European session.
- The negative outlook of the cross remains intact, with bearish RSI momentum.
- The first upside barrier emerges at 110.60; the initial support level to watch is 110.00.
The AUD/JPY cross trades in positive territory near 110.20 during the early European trading hours on Tuesday. Traders await the speech from the Bank of Japan (BoJ) Governor Kazuo Ueda later on Tuesday for more clues on the interest rate outlook.
The BoJ could indicate later this month that underlying inflation has reached nearly its 2% target, according to three sources familiar with the central bank’s thinking. Such a signal would underscore the central bank’s willingness to resume raising interest rates in the coming months.
The sources said after hiking rates in September, some BoJ policymakers remain cautious about another rate increase this month. They would prefer to assess more economic data and evaluate how previous rate hikes have influenced domestic financial conditions before making another move.
On the Aussie front, money markets are now betting the Reserve Bank of Australia (RBA) will likely raise rates at its November policy meeting. The probability of a rate hike fell to around 20%, data from LSEG showed.
Japan and Korea inflation data keep BoJ and BoK on policy alert
Analysts at MUFG/BTMU note that the latest inflation releases from Korea and Japan have kept market attention firmly on underlying price pressures, even as headline moves diverge. In Korea, they point out that "CPI inflation eased to 2.9%yoy in September, matching consensus and down from 3.1%yoy," suggesting some moderation but not enough to take inflation off the policy radar.
In contrast, Japan’s data surprised to the upside. MUFG/BTMU highlight that "headline Tokyo CPI, which serves as a leading proxy for nationwide inflation, accelerated to 2.7%yoy in September, above the 2.5% consensus and 1.9% in August." More strikingly, they stress that "core Tokyo CPI excluding fresh food and energy rose markedly to 3.0%yoy, above the 2.5% consensus and 2.0%yoy in August, marking its highest reading under the Takaichi administration." Taken together, MUFG/BTMU judge that these readings "should keep both the BoK and BoJ attentive to inflation and the need for policy tightening," reinforcing the focus on policy trajectories and, by extension, regional currency positioning.
Technical Analysis: AUD/JPY keeps a bearish vibe under the 100-day SMA
In the daily chart, AUD/JPY retains a bearish near-term bias as price holds beneath the Bollinger middle band (20-period simple moving average) and the 100-day moving average. The pair is further capped by the upper Bollinger band, while the Relative Strength Index (14) around 40.8 sits in a neutral-to-soft range, hinting that selling pressure prevails but without oversold conditions.
On the topside, initial resistance is located near the Bollinger middle band at 110.60, en route to a stronger barrier at the upper Bollinger band around 112.15. Any follow-through buying above this level could pave the way to the 100-day moving average near112.55.
On the flip side, the next meaningful support emerges at the 110.00 psychological level, followed by the lower limit Bollinger band around 109.10. A decisive break would open room for a deeper slide towards the October 1 low of 108.71.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
(This story was corrected at 05:15 GMT on October 6 to say, in the last paragraph, that the next meaningful support emerges at the 110.00 psychological level, not 100.00.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- EUR/JPY could find initial support at the lower boundary of the channel around 176.60.
- The 14-day Relative Strength Index is at 29.78, signaling potential seller exhaustion and eventual stabilization.
- The primary resistance lies at the nine-day EMA at 178.18.
EUR/JPY halts its seven-day losing streak, trading around 177.40 during Asian hours on Tuesday. Technical analysis of the daily chart shows that the currency cross is remaining close to the lower boundary of the descending channel, suggesting the price holds support and a temporary bounce. However, a break below the channel would signal accelerating downward momentum in a steeper downtrend.
The EUR/JPY cross is maintaining a bearish tone as it holds beneath both the nine- and 50-period Exponential Moving Averages (EMAs). The currency cross has recently slipped below the nearer structural floor at 175.70, turning recent price action into a corrective phase, while the 14-day Relative Strength Index (RSI) at 29.78 hovers in oversold territory, hinting that while downside pressure is strong, fresh selling could become more measured in the short term.
The initial support lies at the lower boundary of the channel around 176.60, followed by an 11-month low of 175.70, recorded in November 2025. Further support lies at the 14-month low of 169.72.
On the upside, the EUR/JPY cross may rebound and test the nine-day EMA at 178.18, followed by the 50-day EMA at 181.20. Further resistance lies at the upper boundary of the descending channel around 184.20, followed by the all-time high of 187.95 set on April 17.
ECB tone softens as Lagarde flags growth risks from rising yields
Analysts at Commerzbank argue that the ECB has scope to ease market tensions through communication before resorting to more forceful tools. They note that, despite elevated inflation, ECB representatives could "adopt a less hawkish tone in their public comments, thereby dampening expectations of interest-rate hikes and easing pressure on government bonds." In their view, Christine Lagarde’s recent appearance before the European Parliament’s Committee on Economic and Monetary Affairs already points in this direction, as she stressed that "the sharp rise in bond yields would dampen economic growth and limit the pass-through of higher energy costs to consumers," signalling greater sensitivity to the impact of tighter financing conditions.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.10% | 0.16% | 0.03% | 0.01% | 0.04% | 0.10% | |
| EUR | -0.05% | 0.00% | 0.07% | -0.02% | -0.02% | -0.01% | 0.06% | |
| GBP | -0.10% | -0.00% | 0.08% | -0.04% | -0.02% | -0.02% | 0.08% | |
| JPY | -0.16% | -0.07% | -0.08% | -0.11% | -0.12% | -0.08% | -0.01% | |
| CAD | -0.03% | 0.02% | 0.04% | 0.11% | -0.02% | 0.00% | 0.09% | |
| AUD | -0.01% | 0.02% | 0.02% | 0.12% | 0.02% | 0.00% | 0.11% | |
| NZD | -0.04% | 0.00% | 0.02% | 0.08% | -0.00% | -0.01% | 0.10% | |
| CHF | -0.10% | -0.06% | -0.08% | 0.00% | -0.09% | -0.11% | -0.10% |
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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
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