- China/US trade tensions rise
- Global equities under pressure
- US dollar catches a safe-haven bid
USDCAD open 1.4069, overnight range 1.4030-1.4070, Monday close, 1.4040, WTI 58.38, Gold 4126.79
The Canadian dollar is continuing Friday’s that was sparked when Trump tweeted about hiking China tariffs by another 100%. The tweet fueled demand for safe-haven currencies and the US dollar and Japanese yen rallied, while the other g-10 currencies dropped like rocks.
WTI plunged from Friday’s peak of 62.87 to 57.69 overnight before bouncing to 58.28 in NY trading today. The oil price drop on speculation of reduced demand also undermined the Canadian dollar.
China did not take the latest Trump tariff lying down. Not only did they not speed up export permits for rare-earths they slapped port fees on all US ships that enter Chinese ports. Trump appeared to offer an olive branch to China when he tweeted “Don’t worry about China.”
Asian markets were cautious about the supposed U.S.–China thaw and closed mixed. Japan’s Topix fell 1.99% after reopening, Australia’s ASX 200 added 0.19%, and the Hang Seng remained closed. As of 7:30 a.m.
EDT, European indexes were in negative territory with France’s CAC-40 down 1.01%, Germany’s DAX off 1.33%, and the U.K.’s FTSE 100 lower by 0.38%. S&P 500 futures slipped 0.93%, while the U.S. Dollar Index hovered near 99.40. The U.S. 10-year Treasury yield eased to 4.017%, and gold traded at 4129.76 after touching 4179.71 overnight.
EURUSD traded in a 1.1543–1.1630 range since Friday’s close. The single currency is struggling to recover ahead of French Prime Minister Sebastien Lecornu’s budget presentation and a no-confidence vote later this week. Weaker German ZEW data was overshadowed by U.S.–China tensions. The short-term outlook stays bearish below 1.1680, with a decisive drop through 1.1530 targeting 1.1380.
GBPUSD dropped in a 1.3253–1.3352 range, losing ground after the U.K. employment report showed the jobless rate rising to 4.8% for June–August. The pair slipped to session lows after briefly testing 1.3370 earlier. Broader dollar demand, driven by risk aversion linked to the trade dispute, added to the downward pressure.
USDJPY see-sawed in a 151.63–152.61 range and dipped in Europe as safe-haven flows supported the yen. The pair later rebounded modestly ahead of the U.S. open, helped by Japanese political uncertainty and diminishing expectations for a BoJ rate hike.
AUDUSD traded negatively 0.6573–0.6441 range, sliding steadily as renewed U.S.–China trade friction weighed on risk sentiment and commodity-linked currencies.
There is no Canadian or US economic data today
