Loonie firms as oil hits highest since May and US eyes Canada tariff relief
The Canadian dollar firmed as war worries pushed oil to its highest since May and a report said the US may lift some tariffs on Canadian goods.
Live chart · USDCAD, USDJPY, EURUSD, DXY · TradingView
The Canadian dollar was the standout major on Friday as war worries pushed oil to its highest level since May. A report that Washington may lift some tariffs on Canadian goods added a second tailwind, while the yen kept its haven bid and the euro stayed on the back foot after this morning's weak PMI data.
What moved and why
Oil drove the afternoon. According to the investingLive Americas wrap, WTI crude rose $4.01 to $103.47, while gold fell $24 to $3,999.
The geopolitical backdrop hardened late in the session. investingLive reports that President Trump told a rally the US "may do another operation" against Iran. The same report says the IRGC Navy stated that two supertankers struck naval mines. investingLive noted the market is betting on short-term US action, which it said explains the strong bid in oil over the past two days.
Trade news also favoured Canada. investingLive, citing the Wall Street Journal, says the US is preparing to lift 50% tariffs on some Canadian agricultural and forestry products, with a proclamation possibly coming as soon as Friday. The report links the move to US election politics.
In the ECB fixing, USD/CAD fell 0.28% to 1.3995, its first fixing below 1.40 in the past week. It is down 1.17% over five fixings. Investing.com had already flagged on Thursday that oil prices and BoC rate hike bets were supporting the loonie.
Elsewhere, Investing.com reports the dollar steadied as AI jitters spurred yen gains and weighed on the euro. It also says Treasury yields are set for a third weekly drop as AI worries fuel haven demand.
The majors
ECB reference rates from the fixing of 23 October 2026, compared with the 22 October fixing (ECB):
| Pair | Fixing 23 Oct | Previous | Change | 5 fixings |
|---|---|---|---|---|
| EUR/USD | 1.1193 | 1.1205 | -0.11% | -0.53% |
| GBP/USD | 1.3368 | 1.3376 | -0.06% | +0.25% |
| USD/JPY | 156.80 | 157.05 | -0.16% | -0.77% |
| USD/CHF | 0.8244 | 0.8220 | +0.28% | +0.05% |
| AUD/USD | 0.7022 | 0.7012 | +0.15% | +0.91% |
| USD/CAD | 1.3995 | 1.4034 | -0.28% | -1.17% |
| NZD/USD | 0.5687 | 0.5681 | +0.11% | +0.41% |
USD/JPY fixed lower for a fifth straight day. The franc was the weakest major in the fixing. USD/MXN fixed at 18.782, up 2.17% over five fixings. For background on why the euro slipped, see our sister site's explainer on what the French PMI drop below 50 means.
Data and central banks
US data were mixed. investingLive reports final October University of Michigan sentiment at 48.0 against 46.3 expected. Current conditions fell to 46.7 from 50.9, while one-year inflation expectations held at 4.7% and five-year at 3.5%.
The S&P Global flash services PMI came in at 57.9 against 58.0 expected, according to investingLive. Manufacturing beat at 56.0 versus 55.5. Selling prices rose at the sharpest rate since August 2022 and new orders hit their highest in over four and a half years.
In Canada, August retail sales rose 1.2% against 1.3% expected, investingLive reports. Sales ex-autos beat at 1.2%, and the September advance estimate showed a 0.7% gain.
The ECB published its September Consumer Expectations Survey on Friday. On the yen, Investing.com reports that Citi expects USD/JPY to remain range-bound around the BoJ's rate decision.
What to watch next
- US tariff proclamation: whether the reported relief for Canadian farm and forestry goods is confirmed.
- Iran: any follow-up to Trump's comments and the reported tanker mine strikes, with oil the main channel to FX.
- Bank of Japan: the upcoming rate decision flagged by Citi.
- Bank of Canada: rate hike bets cited by Investing.com as a support for the loonie.
How we make this article: software gathers the market data and the news from the sources linked in the article, then cross-checks them. AI writes the text. People choose the sources, set the rules and run the process. Not investment advice.