- Risk sentiment is poor due to Trump and Powell feud.
- Equities consolidating recent gains
- US opens with minor bid.
USDCAD open 1.3678, overnight range 1.33638-1.3681, close 1.3637, WTI 66.24, Gold 3346.07
The Canadian dollar came under pressure yesterday and continued to do so overnight. The Loonie is being undermined by concerns about the fast-approaching tariff deadline of August 1 as Canada faces 35% tariffs in the absence of a deal.
The Bank of Canada monetary meeting is next Wednesday and rates are likely to be left unchanged due to the uncertainty around US and Canada trade.
Trump visited the Fed buildings to ratchet up pressure on Fed Chair Powell. Trump dramatically claimed the project's cost had ballooned to $3.1 billion. Powell denied the number and pointed out it included a third building that had been completed five years earlier.
Asian markets closed lower with the Hang Seng falling 1.09%, Japan’s Topix down 0.86%, and the ASX 200 off 0.49%.
European markets are negative (as of 7:45 EDT). The German DAX has slipped 0.72%, while the FTSE 100 is down 0.36% while the French CAC 40 is flat. S&P 500 futures are up 0.08% and the US 10-year Treasury yield is trading at 4.41%.
EURUSD traded within a 1.1731–1.1761 band after optimism following ECB President Christine Lagarde’s confident tone faded to concern around EU and US tariff talks. German Ifo data was ignored.
GBPUSD dropped in a 1.3461–1.3516 range due to a spate of soft economic data recently, which include weak PMI, falling consumer confidence, and underwhelming retail sales.
USDJPY climbed from 146.82 to 147.90 and remains near the top of that range. Momentum from the earlier US–Japan trade agreement has faded, and attention is now on next week’s Bank of Japan policy meeting. Tokyo’s core CPI rose 2.9% year-over-year, slightly below expectations, which may give the BoJ further reason to delay tightening.
AUDUSD slipped within a 0.6555–0.6599 range as global risk sentiment softened. Markets shrugged off Australia’s decision to allow US beef imports, but Trump didn’t. He took to social media to declare it “undeniable and irrefutable proof” that American beef is the best in the world. His enthusiasm aside, Australia remains the second-largest beef exporter, and the US is the biggest consumer of American beef, making the move more symbolic than substantive.
US Durable Goods Orders for June are ahead.
