USD/CAD Holds Steady as Markets Await US-Iran Nuclear Talks with Oil in Focus

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3570-1.3820

Euro                1.6010-1.6260

Sterling           1.8380-1.8630

WTI Oil (opening level) $66.03

The CAD/USD is opening at 1.3695 ( 0.7302 )

USD/CAD is broadly stable ahead of nuclear talks between the US and Iran on Thursday. The outcome will have a significant impact on the oil price. The CAD is highly sensitive to changes in the oil price, given that the Canadian economy is the largest exporter of oil to the US.

USD/CAD pair is trading in a very narrow range as it stabilizes just above the 20-day Exponential Moving Average near 1.3670, keeping price action aligned with the broader upswing that started from the mid-1.34s. The price could extend towards the January 23 high around 1.3800 if it breaks above the January 27 high of 1.3740.

Initial support aligns with the 20-day EMA at 1.3671, while a daily close back beneath the average would leave the pair vulnerable to downside towards the February 13 low around 1.3600.

Anybody want to toss a coin and guess which way it will go?

Headlines

• Trump’s State of the Union speech was short on policy hints on trade, tariffs or fiscal or foreign policy as he spent most most of his time in the speech touting his strong record, the state of the economy, including improved inflation trajectory and the stock market. He also attacked political opponents, the Supreme Court for its recent decision on his tariffs and noted plans to go after what he described as voting fraud.
• Japan’s Prime Minister Takaichi announced two Bank of Japan nominees that were seen as “reflationist” and therefore dovish. This inspired a sharp steepening in the Japanese yield curve, with short yields falling slightly, while the longest dated yields rebounded strongly after their recent steep fall.
• US Consumer Confidence rose by 2.2 points to 91.2 in February despite affordability and labor market concerns, per Conference Board data.
• The S&P Case-Shiller 20-City Home Price Index rose 1.4% year-over-year in December 2025, indicating a cooling housing market as gains lagged behind 2.7% inflation. Chicago led with a 5.3% increase, while Tampa fell 2.9%. Sun Belt markets like Phoenix, Dallas, and Miami also saw declines.
• US private employers added an average of 12,750 jobs per week in the four weeks ending February 7, 2026, up from 11,500 previously, per ADP. This marks the fastest hiring pace since late November, indicating accelerating job growth.
• The UK CBI retail sales balance fell to -43 in February 2026, with sales described as “poor.” Sentiment is low, leading to reduced investment and employment. Retail prices grew normally, while online sales surged. Inventory management is cautious amidst weak demand and rising costs.

Key Points

• Equities: Equities: US bounced as artificial intelligence panic cooled, Europe steadied with chip gains, Asia mixed, with Hong Kong down and China up
• Volatility: Volatility: Vix lower, event risk ahead, 0dte puts still pricier
• Digital Assets: Digital assets: Majors firmer, ibit/etha slightly softer, crypto proxies bid
• Fixed Income: Fixed Income: Japan’s yield curve steepens sharply on dovish BoJ nominees
• Currencies: Currencies: JPY weaker after dovish BoJ nominees, but USD slightly weaker still. AUD strong on inflation data.
• Commodities: Commodities: Gold and especially silver rebound strong in Wednesday’s Asia session