April 22, 2025

USDCAD: open 1.3839, range Fri.-Mon. 1.3793-1.3847, close 1.3842

USDCAD direction is being determined by global US dollar sentiment and that sentiment has been bearish all of April.  Trump’s global trade war has set America vs the World and traditional US allies have been discarded.  So has the US dollar. Widespread US dollar selling as global investors abandon US assets has given the Canadian dollar a boost, by default.  In addition, US recession fears have driven CAD/US 10-year interest rate spreads to -118.5 from -153 in February.

Weaker commodity prices are another drag on Canadian dollar gains with the GSCI Commodity index falling from 573 at the beginning of the month to 536.21 today.

WTI oil prices drifted lower in the wake of US dollar gains. Prices dropped from 63.56-to 62.74. Canadian crude producers got some good news with reports that Chinese buyers took 7.3 million barrels of crude from the Vancouver port in March.

Canadian Industrial Product Prices rose 0.5% in March (forecast 0.3%, February 0.4% m/m). Raw Materials Product price index fell1.0% m/m, forecast 0%, previous 0.3%.

USDCAD Technicals

The USDCAD technicals are bearish while prices are trading below 1.3860 and looking for a move below 1.3770 to extend losses to 1.3720.  A break above 1.3850 targets 1.3940

Longer term, USDCAD appears to be consolidating in a 1.3770-1.3950 zone.  A break below 1.3720 puts the focus on 1.3430 while a move above 1.3950 targets 1.4110.

For today, USDCAD support is at 1.3770 and 1.3740. Resistance is at 1.3860 and 1.3890

Today’s Range: 1.3790-1.3880

Chart: USDCAD 4 hour

FX at a Glance

Blame in on the Fed

Magicians use deflection to misdirect attention away from sleight-of-hand moves with gestures, patter, or dramatic distractions. So does Trump.  His Secretary of Defence can’t keep secrets. This pick for FBI boss wants to be in the spotlight. His trade war is driving the economy into a recession.  It is all his fault but rather than admit his failings he is trying to shift the blame to the Fed.

Yesterdays rant sent equity markets into a tailspin.

 “Preemptive Cuts” in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other “things” trending down, there is virtually No Inflation. With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW. Europe has already “lowered” seven times. Powell has always been “To Late,” except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”

Gold Rush

Trump’s trade war and attacks on Fed Chair Jerome Powell have encouraged investors to dump US assets including stocks, bonds and the US dollar and park the proceeds into safe havens, like the Japanese yen, Swiss franc, and gold (XAUUSD). The price of gold has surged 30% since Trump’s inauguration.

EURUSD
NY Open: 1.1490, Overnight Range: 1.1482-1.1548
EURUSD soared through resistance at 1.1500 and hit 1.1548. The last time it saw that level was February 1, 2022. It has now set its sights on the 1.2000 level, but it will not be a one-way street as the ECB is still in rate-cutting mode. A move below 1.1470 suggests further losses to 1.1395.

GBPUSD
NY Open: 1.3367, Overnight Range: 1.3362-1.3424
GBPUSD is consolidating yesterday’s gains, but profit-taking has driven it from its session peak to the low. BoE policymaker Megan Greene seemed to criticize Trump for interfering in Fed policy and threatening to fire Powell. She said central bank independence is crucial to lowering inflation.

USDJPY
NY Open: 140.46, Overnight Range: 139.89-141.17
USDJPY gapped lower at Monday’s holiday-thinned opening and extended its losses overnight. Trump’s ongoing criticism of Fed Chair Jerome Powell has sparked safe-haven demand for yen. Reuters reported that Japanese officials will push back against US demands for them to boost its currency. USDJPY closed at 142.22 on Friday and opened at 141.50 Monday. That gap is likely to get filled in the coming days.

AUDUSD
NY Open: 0.6402, Overnight Range: 0.6399-0.6440
AUDUSD made a new 2025 high, then dropped to the bottom of its overnight range with direction driven by broad US dollar sentiment and the state of the US/China trade war.

NZDUSD
NY Open: 0.6005, Overnight Range: 0.5981-0.6029
NZDUSD is consolidating Monday’s gains. New Zealand posted a trade surplus of NZ 970 million, its highest level since May 2020, and partly due to the weaker currency. The RBNZ remains on track to cut rates by 25 bps at its May 28th meeting. There is a gap from where NZDUSD closed on Thursday (0.5935) and opened on Monday (0.5965) which is likely to be filled before the end of the week.

USDMXN
NY Open: 19.6399, Overnight Range: 19.6266-19.7449
USDMXN fell on the back of widespread US selling pressures vs the major currencies as Trump continues his attack on Fed Chair Jerome Powell. The USDMXN technicals are bearish below 19.8200.

China Snapshot`

PBoC fix:  7.2055. (Prev. 7.2069).

Shanghai Shenzhen 300 rose 0.33% to 3784.88

The PBOC leaves 1-year Loan Prime Rate (LPR) unchanged at 3.1%, and the 5-year LPR, unchanged at 3.6%.

China pushes back on countries that try to curry favour with the US administration, at China’s expense. The Americans are asking many nations to reduce trade with China if they want to get a deal with the US, including measures such as levying secondary tariffs on imports from countries with close China trade ties (Vietnam for example).

FX high, low, open (as of 6:00 am ET)

Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.