- Trump administration subpoenas Fed Chair Powell
- Gold prices soar
- US dollar opens under pressure.
USDCAD open: 1.3876, overnight range 1.3868-1.3918, close 1.3915, WTI 58.80, Gold 4594.05
The Canadian dollar traded in a wide USDCAD band (1.3642–1.4013) since early December and closed out 2025 with a 4.39% annual gain. It is a surprisingly resilient outcome given the political turbulence unleashed by the Trump Tornado at home and abroad.
Friday’s US and Canadian labour reports failed to move the needle. Canada added 8,200 jobs in December, though the unemployment rate climbed to 6.8% from 6.5%. South of the border, employment data continues to be viewed with skepticism as distortions from the lingering US government shutdown muddy the signal.
The Canadian dollar is suffering from concern about Canada’s prospects after Washington seized Venezuelan oil assets and Trump’s stated intent to annex Greenland by force if required.
WTI crude remains unsettled, trading inside a 58.46–59.77 range. The confiscation of Venezuelan oil and tankers carrying its crude raises the possibility that China may seek alternative suppliers, a shift that could help rebalance global oil supply and demand.
Over the weekend, Trump’s Justice Department loyalists issued subpoenas to Fed Chair Jerome Powell, dangling the threat of criminal charges for refusing to cut interest rates on command. The stated rationale centered on alleged cost overruns tied to Fed building renovations.
Asian equity markets brushed off the latest Fed drama and closed mostly higher. Japan’s Topix was shut for a holiday, while Hong Kong’s Hang Seng jumped 1.44% and Australia’s ASX 200 gained 0.48%.
As of 8:00 am, European markets were trading mixed but broadly flat, with Germany’s Dax outperforming, up 0.49%. S&P 500 futures are under pressure, down 0.52%, reflecting unease over political interference at the Fed. The US Dollar Index sits at 98.80, and the US 10-year Treasury yield is 4.206%
EURUSD traded in a 1.1622–1.1696 range and is hovering just below the upper end in early New York trading. Renewed concerns about Fed independence reversed a January pullback from 1.1742 to 1.1622. Investors remain uneasy about the prospect of US monetary policy being dictated from the Oval Office. That said, upside momentum may be capped by fears that any US military move on Greenland would fracture NATO.
GBPUSD moved within a 1.3391–1.3475 range and is holding near the highs in New York as broad US dollar selling followed news of Powell’s subpoena. For now, the move looks headline-driven rather than structural, with the pair consolidating inside a wider 1.3370–1.3570 band.
USDJPY traded in a 157.52–158.20 range in subdued conditions with domestic markets closed. The pair eased off the highs as traders grew wary of levels that could prompt Bank of Japan intervention. Political uncertainty also weighed, with reports suggesting Prime Minister Sanae Takaichi may be considering a snap election.
AUDUSD traded between 0.6679 and 0.6713, with price action largely mirroring broader US dollar sentiment. The pair continues to find support from expectations that the RBA maintains a hawkish bias, reinforced by persistently sticky inflation data.
The US and Canadian economic calendars are empty today.
