- Hawkish sounding Powell lifts US dollar.
- Trump announces trade deals and more tariffs.
- US dollar rises across the board.
USDCAD open 1.3848, overnight range 1.3813-1.3848, close 1.3830, WTI 69.37, Gold 3307.03
The Canadian dollar is on the defensive. The combination of a hawkish-sounding FOMC, a timid Bank of Canada and looming 35% tariffs from Trump are weighing on the currency.
The Bank of Canada opted for the path of least resistance, holding rates steady while blaming uncertainty around global trade for clouding the economic outlook.
WTI is holding recent gains, trading within a 69.37–70.42 range. Prices are underpinned by fresh U.S. sanctions on China for buying Iranian crude and a pledge to slap 25% tariffs on Indian goods in response to its Russian oil purchases.
Trump burned through the bandwidth on his TruthSocial account yesterday and overnight with a barrage of tariff threats. Taiwan, India, and Canada were all in the crosshairs as he mixed flattery with condemnation toward America’s former allies.
Asian equity closed mixed. Australia’s ASX 200 slipped 0.15%, Hong Kong’s Hang Seng tumbled 1.60%, while Japan’s Topix gained 0.70%.
European equities opened higher led by the UKTSE 100 which has climbed 0.40%, while the German DAX added 0.31%. U.S. 10-year yield is at 4.34%.
EURUSD traded in a 1.1403–1.1460 range and stayed offered in the aftermath of the FOMC and lingering dissatisfaction with the one-sided EU-U.S. trade agreement. German inflation data and a modest tick down in Eurozone unemployment to 6.2% did little to alter the bearish tone.
GBPUSD ranged between 1.3211 and 1.3282 and is near the low end of that band in New York trading. The currency is struggling under the weight of broad U.S. dollar strength, the hawkish Fed outlook, and expectations that the Bank of England will cut rates by 25 basis points to 4.00% on August 7.
USDJPY climbed from 148.59 to 149.99 following the Bank of Japan’s decision to leave rates unchanged. The central bank’s statement flagged concerns about trade friction and suggested inflation momentum may stall, which bolstered the greenback.
AUDUSD traded in a 0.6434–0.6477 range and remains heavy. Sentiment is soured by the growing divergence between RBA and Fed policy trajectories. Markets are pricing in an RBA rate cut on August 12, while the Fed looks content to hold rates steady. The 50% copper tariff didn’t help risk appetite, though strong Australian data helped cushion the downside. June retail sales jumped 1.2% and building permits surged 11.9%.
Canada’s May GDP is expected to shrink by 0.1%, matching April’s performance and reinforcing concerns that the domestic economy is losing traction. Today’s U.S. data includes Weekly jobless claims (forecast 224,000) and core PCE price index (forecast 0.3%).
