Insights 
VT 
Currency Performance Today
Today, the USD showed varied performance against major currencies, holding strongest against the Swiss Franc. The heat map illustrates percentage changes of currency pairings, using the left column as the base currency and the top row as the quote currency. Notably, the USD declined 0.41% against the CAD today.
Looking back at this analysis from late 2019, we see the market was focused on a potential US-China trade deal and an easing Federal Reserve. Today, on October 27, 2025, the landscape is entirely different, making that old support level of 1.3975 a distant memory. The key drivers now are persistent inflation differentials and the high cost of energy, not trade skirmishes.
The USD/CAD pair is currently trading in a tighter range around 1.3550, well below the levels discussed in the 2019 piece. Oil prices, a primary driver for the Canadian dollar, are a major factor, with WTI crude holding firm above $85 per barrel throughout this quarter. This is a stark contrast to the $61 oil price that was considered a two-week high back in 2019.
Current Market Strategy
Given this new environment, derivative traders should adjust their focus from directional bets based on trade headlines to strategies centered on volatility and central bank policy divergence. The Federal Reserve has signaled a pause with the federal funds rate holding at 4.75%, while the Bank of Canada is facing pressure from a slowing housing market. This divergence suggests options strategies, like straddles or strangles, could be effective to trade potential breakouts around upcoming inflation data releases.
Instead of watching for a break of 1.3975, we are now seeing significant options interest build around the 1.3400 and 1.3650 strikes for December expiries. This indicates the market is pricing in range-bound activity unless there is a significant shock from energy markets or central bank announcements. Therefore, selling premium through strategies like iron condors might be more prudent than positioning for a large directional move like the one anticipated in 2019.
