May 13, 2025
USDCAD: open 1.3983, overnight range 1.3958-1.3994, close 1.3975
USDCAD traded quietly in a somewhat calm overnight session, helped by Trump visiting his business interests in the Middle East, which includes stops in Saudi Arabia, United Arab Emirates and Qatar (home of the free 747).
USDCAD downside appears to be limited because of increased odds that the Bank of Canada will be forced to cut rates again on June 4, following another weak unemployment report and the ongoing economic risks from Trumps tariffs.
WTI oil is steady in a 61.65-62.55 range. Traders are struggling with conflicting forces. Saudi Arabia wants increased production to punish Opec member who produce more than their agreed quota while the tariff retreat between US and China could spark renewed crude demand.
Canadian will be awaiting news of PM Carney’s cabinet picks
USDCAD Technicals
The intraday USDCAD technicals are unchanged from yesterday. The move above 1.3940 sets the stage for further gains to 1.4120 although resistance in the 1.4000-1.4120 is formidable. A decisive break below 1.3940 negates the upside pressure.
The medium term technicals are shifting to a bullish outlook supported by the break above the 61.8% Fibonacci retracement level at 1.3951. However, the bullish trend needs to clear resistance at the 1.4010 level (200-day moving average to confirm a sustained upside.
For today, USDCAD support is at 1.3940 and 1.3890. Resistance is at 1.4020 and 1.4060.
Today’s Range: 1.3940-1.4020
Chart: USDCAD daily
FX at a Glance
Back to Basics-Temporarily
Traders have reverted to looking at data releases in the wake of the tariff war thaw between the US and China, but reactions will be measured. That’s because China and the US merely suspended the sky-high tariffs on each other and that suspension could disappear at Trump’s whim.
US CPI was a mixed bag of somewhat stale data. Headline CPI rose just 0.2% which was below the forecast for a 0.3% gain but above the -0.1% result in March. Core-CPI ticked up to 0.2% from 0.1% in March but it was below the 0.3% guesstimate. All in all, a non-event.
Equities Curb Their Enthusiasm
Wall Street closed with spectacular gains yesterday. The NASDAQ Composite index soared 4.36%, while the S&P 500 posted a none-too-shabby 3.26% gain. Asian markets were less enthusiastic. Japan’s Topix rose 1.10% and Australia’s ASX 200 gained 0.43% but the Hong Kong Hang Seng lost 1.87%.
European bourses are mixed and hovering around flat, while S&P 500 futures have dropped 0.26%. Gold (XAUUSD) is attempting to recoup some of Monday’s losses and sits at 3251.96. Prices need to rally to 3324.77 to fill the Friday close–Monday open gap. The US 10-year Treasury yield is steady at 4.451%. The US dollar index (USDX) is consolidating Monday’s gains at 101.63.
EURUSD
NY Open: 1.1106, Overnight Range: 1.1087–1.1125
EURUSD is trading defensively and traders ignored data showing German ZEW Economic Sentiment improving in May while the current situation was unchanged. Traders are more concerned after US Treasury Secretary Scott Bessent implied difficult trade negotiations with the EU, saying “Europe suffers from a ‘collective action problem.’” He used Italy wanting something that was different from France as an example, which could prolong talks.
GBPUSD
NY Open: 1.3213, Overnight Range: 1.3170–1.3221
GBPUSD is trying to claw back some of yesterday’s losses despite disappointing employment data which showed the unemployment rate rising to 4.5% from 4.4%. It wasn’t all bad—wages were rising faster than inflation. Traders are content to await Thursday’s data dump when GDP, industrial production, manufacturing production, and trade reports are released.
USDJPY
NY Open: 147.98, Overnight Range: 147.65–148.47
USDJPY is close to the middle of its range, supported by unwinding of some safe-haven trades but remains vulnerable to shifts in US dollar sentiment. Traders are awaiting key GDP data on Friday.
AUDUSD
NY Open: 0.6411, Overnight Range: 0.6362–0.6420
AUDUSD is well on its way to recouping yesterday’s losses, with prices underpinned by the thaw in US and China tariff hostility.
NZDUSD
NY Open: 0.5894, Overnight Range: 0.5847–0.5900
Kiwi traded in similar fashion as Australia, with prices supported by higher Fonterra milk prices and improved risk sentiment following the China/US tariff reductions for 90 days.
USDMXN
NY Open: 19.5810, Overnight Range: 19.5650–19.6436
USDMXN is consolidating yesterday’s gains, with soft industrial activity data (actual -0.9% m/m, previous 2.2%) supporting prices and ahead of Banxico’s expected 50 bp rate cut on Thursday.
China Snapshot`
China Snapshot`
PBoC fix: 7.1991 vs exp. 7.2188 (Prev. 7.2066)
Shanghai Shenzhen 300 rose 0.15% to 3896.26
China removes ban on Boeing deliveries. Container ship traffic to rise sharply as importers rush to front-load orders.
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
