- FOMC meeting today-rates to be left unchanged.
- Trump blinks and China agrees to meet—in Switzerland
- US dollar trading with a mixed bias on improved risk sentiment.
USDCAD: open 1.3798, overnight range 1.3767-1.3804 close 1.3777, WTI 59.48, Gold 3369.78
The Canadian dollar rose on the back of the news that the US and China will meet to talk trade. Yesterday, Prime Minister Carney met with Trump at the White House to begin the reset of the Canada/US relationship which includes everything, not just trade.
The bigger story occurred after the American’s blinked and asked China for a meeting to start trade negotiations. To that end, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are set to meet with Chinese Foreign Minister He Lifeng in Switzerland from May 9 to 12.
WTI oil recouped this week’s losses and rose to 60.25 overnight due to hopes of renewed global demand from reduced tariff risks.
Its Federal Reserve monetary policy meeting day and they are widely expected to maintain the status quo. The latest mix of economic data and uncertainty over how Trump’s tariffs are impacting inflation and growth are keeping policymakers on the sidelines.
Asian equity markets liked the China/US news and ended the session on a firmer note. Australia’s ASX 200 rose 0.33%, and Japan’s Topix gained 0.31%. In contrast, European markets opened with a sour tone following disappointing eurozone retail sales and caution ahead of the FOMC meeting. The German DAX slipped 0.22% and the FTSE 100 declined 0.31%. S&P 500 futures rose 0.54% on optimism surrounding the U.S.-China talks. Meanwhile, the 10-year Treasury yield held steady at 4.31%.
EURUSD is modestly firmer and rose in a 1.1325–1.1378 range with gains due to signs of progress in U.S.-China relations and the election of Friedrich Merz as Germany’s Chancellor on the second ballot. Eurozone retail sales rose 1.5%, slightly below the forecast of 1.6%, capping the topside.
GBPUSD bounced in a 1.3323–1.3381 range. The currency pair topped out at 1.3402 yesterday before retreating to session lows near the NY open. Traders are staying cautious ahead of today’s Fed announcement and the Bank of England policy decision tomorrow.
USDJPY traded erratically in a 142.42–143.45 band but opened in New York unchanged from its previous NY close. Traders are waiting for updates on U.S.-Japan trade discussions. Modest optimism from U.S.-China trade headlines helped keep the pair supported.
AUDUSD is near the bottom of its 0.6464–0.6515 range. The Aussie slipped from yesterday’s high on caution ahead of the Fed. Soft domestic data continues to reinforce the case for RBA easing, though optimism around a potential U.S.-China deal is helping cushion the downside.
There are no US and Canadian economic reports.
