May 7, 2025
USDCAD: open 1.3798, overnight range 1.3767-1.3804 close 1.3777
Prime Minister Carney wasted a couple of hours flying from Ottawa to Washington to meet with Trump. The U.S. President was at his boorish best ahead of and during their White House encounter. First came a tweetstorm railing about subsidizing Canada and insisting the U.S. doesn’t need “anything made in Canada.” Then the Prime Minister’s motorcade was deliberately delayed at the White House gates in another petty power move.
Carney could barely get a word in edgewise as he suffered through about 30 minutes of blowhard Trump, pontificating and haranguing in a one-act performance for his “boyz,” who grinned and smiled on cue. Unlike the Zelensky meeting, his attack dog Vance was leashed and muzzled.
Nothing was accomplished—the tariffs remain in place. The closed-door meeting had a different tone according to the Globe and Mail but still Trump only spoke in general terms.
WTI oil rallied yesterday and overnight, rising from a low of 57.03 on Tuesday to 60.25 overnight before retreating to 59.45 in NY. The gains were due to improved risk sentiment and hopes that the preliminary China/US trade talks in Switzerland will yield higher global demand.
Ther are no US or Canadian economic reports today. However, price action can get sloppy around the 10:00 am option expiry window when $1.1 billion of 1.3775-80 USDCAD strikes roll off.
USDCAD Technicals
The intraday USDCAD technicals are mildly bearish below 1.3800, with price action clinging to the lower Bollinger Band at 1.3748 and unable to build momentum above resistance in the 1.3830-40 area. A sustained break above 1.3840 would relieve downside pressure and open the door to a test of 1.3910. Failure to do so targets support in the 1.3720-1.3740 zone.
The medium-term technicals maintain a bearish bias while below 1.3950, reinforced by the break below the 200-day moving average. A decisive move under 1.3720 would expose the 1.3600 area.
For today, USDCAD support is at 1.3750 and 1.3720. Resistance is at 1.3830 and 1.3910.
Today’s Range: 1.3760-1.3840
Chart: USDCAD daily
FX at a Glance
Trump Blinks and China Agrees to Meet.
Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet China’s Foreign Minister He Lifeng in Switzerland, May 9–12. Trump must have got tired of waiting for China to call as China’s Foreign Ministry claims the meeting was requested by the Americans. It is far from a Big Announcement, but it is a start to a trade war détente.
FOMC Decision Day
Actually, it is FOMC non-decision day. A spate of mixed economic data and uncertainty around the impact of Trump’s tariffs on inflation and growth will keep the Fed on the sidelines. That stance will be sure to annoy Trump who wants lower rates despite the inflationary impact of his tariffs.
Global Equities are Mixed
Asian equity indexes closed on a positive note with Australia’s ASX 200 gaining 0.33% and Japan’s Topix rising 0.31%. Hong Kong’s Hang Seng rose 0.13%. It was a different story in Europe after weaker-than-expected eurozone retail sales soured risk sentiment. The German DAX is down 0.14%%, the French CAC 40 has lost 0.60% and the UK FTSE 100 is off by 0.44%. S&P 500 futures traders like the news on China/US trade and the index is up 0.46%. The 10-year Treasury yield is steady at 4.32% while improved risk sentiment knocked gold (XAUUSD) down to 330.07 from 3426.28 yesterday.
EURUSD
NY Open: 1.1357, Overnight Range: 1.1325–1.1378
EURUSD is grinding higher in a choppy manner, supported by news of the China/US trade war détente and by Germany electing Friedrich Merz Chancellor on the second ballot yesterday. Eurozone retail sales rose 1.5% compared to the forecast of 1.6%, which helped limit gains. The German Defence Minister is asking to spend €60 billion in 2025.
GBPUSD
NY Open: 1.3335, Overnight Range: 1.3323–1.3381
GBPUSD peaked at 1.3402 yesterday and drifted steadily lower until finding a bottom at 1.3323 just before NY opened. Traders are cautious ahead of today’s FOMC and Thursday’s Bank of England policy meetings.
USDJPY
NY Open: 143.30, Overnight Range: 142.42–143.45
USDJPY didn’t do much of anything overnight and opened in NY where it opened yesterday, albeit with some travel time in between. Traders are biding their time until they get some news on US and Japan trade talks. Prices are supported by the slight easing of China and US trade tensions.
AUDUSD
NY Open: 0.6468, Overnight Range: 0.6464–0.6515
AUDUSD retreated from yesterday’s peak on caution ahead of today’s Fed meeting. Australian economic data was weak, which supports calls for RBA rate cuts. However, the downside is underpinned by hopes for a US and China trade agreement.
NZDUSD
NY Open: 0.5985, Overnight Range: 0.5981–0.6023
NZDUSD mirrored AUDUSD moves and prices did not get any help from the Q1 employment report, which remains weak. The unemployment rate was unchanged at 5.1%. NZDUSD gains were also limited by the RBNZ Financial Stability Report which warned of “severe” economic risks from tariffs.
USDMXN
NY Open: 19.6283, Overnight Range: 19.6125–19.6802
USDMXN tracked broad US dollar sentiment and prices retreated on the news of the China/US meeting in Switzerland.
China Snapshot`
PBoC fix: 7.2008 vs exp. 7.2518 (Prev. 7.2014).
Shanghai Shenzhen 300 fell rose 1.01% to 3806.54
Caixin April Services PMI 50.7 vs forecast 51.7, March 51.9, Composite PMI (Apr) 51.1 (Prev. 51.8)
Services PMI fell to its lowest level in seven month which increased the odds that economy was slowing do to Trump tariffs. Analysts are now predicting GDP growth of 4.2% y/y compared to the governments official target of 5%.
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
