Foreign investment in Canadian securities rose from $25.92 billion to $31.32 billion in September. This increase shows growing interest in the Canadian market.
Elsewhere, the Dow Jones Industrial Average continued to drop as weaker stocks affected its performance. The USD/JPY remains near nine-month highs due to the strengthening US Dollar. Meanwhile, silver prices have edged up but face resistance below $51.00 amidst mixed signals in the market.
Eur and Gbp Movement
The EUR/GBP dropped back due to profit-taking and remarks from the Bank of England, even after reaching high points. The GBP/USD is around 1.3165, struggling due to ongoing UK fiscal concerns and anticipation of US job data.
Gold is currently holding steady just below $4,100 as traders moderate their expectations for more Federal Reserve rate changes. Bitcoin and major altcoins show slight recovery amid ongoing unwinding of positions, with Bitcoin trading above $95,000.
As the new week begins, focus turns to US economic data and tech sector performance, particularly Nvidia’s potential impact. Chainlink remains above $14.00 despite low retail interest and a quiet derivatives market.
Impact of US Dollar Strength
The surge in foreign investment into Canadian securities, hitting $31.32 billion in September, points to a strong Canadian dollar. Statistics Canada confirmed that October inflows were also strong at over $28 billion. This ongoing demand for Canadian assets may make it risky to position against the loonie in the coming weeks.
Meanwhile, the US dollar is gaining strength, with markets now pricing in less than a 10% chance of a Federal Reserve rate cut in December. This view solidified after last week’s October CPI report showed core inflation stubbornly above the Fed’s target at 3.4%. Strategies that favor the US dollar seem well-positioned, as a hawkish Fed provides support.
This dollar strength is pressuring other major currencies, with the EUR/USD trading below 1.1600 and the pound around 1.3160. Ongoing concerns about the UK’s fiscal health, unchanged since the budget debates in the summer of 2025, continue to weigh on the pound. This weakness should be considered when trading currency pairs against the dollar.
Gold is struggling below $4,100 an ounce, as a strong dollar and stable US interest rates make holding this non-yielding asset less attractive. The metal has remained in a similar position since late 2024, failing to break out as expectations for rate cuts fade. For now, options strategies that profit from low volatility, such as selling strangles, might be more effective than pursuing a clear directional bet.
Although Bitcoin is tentatively recovering above $95,000 after last month’s steep drop, the derivatives market remains cautious. Open interest in crypto futures is down about 25% from its peak in the third quarter of 2025. This indicates that while prices are rising, lack of confidence from larger traders makes the recovery fragile.
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