June 26, 2025
USDCAD: open 1.3688, overnight range 1.3678-1.3730, close 1.3726
USDCAD dropped on widespread US selling pressure triggered by a Wall Street Journal report that Trump wants to announce Powell’s replacement by September or October.

Canada may re-emerge as a petro-currency under “Climate Change Carney.” The Prime Minister is the former UN Special Envoy on Climate Action who has been forced to transition Canada’s economy and prosperity from nearly completely relying on the US to improving self-reliance and finding alternative trade partners. To that end, Mr Carney appears ready to tap into Canada’s more than $13 trillion in proven oil reserves enroute to making Canada an energy superpower. Or maybe Unicorns do exist.

Month-end is fast approaching and with it the official kick-off to summer. The S&P 500 has risen sharply in June and if current levels hold, it is not much of a stretch to anticipate USDCAD selling as portfolio managers rebalance
There are no Canadian economic reports on tap.

USDCAD Technical Outlook:
The intraday technicals are bearish while prices are below 1.3780 and looking for a break below the 1.3640-50 to extend losses to 1.3605. A break above 1.3730 targets 1.3770.
Longer term, the bearish USDCAD trend remains intact while below 1.3950 although downside momentum is lacking. A break below 1.3600 targets 1.3510.
For today, USDCAD support is 1.3650 and 1.3610. Resistance is 1.3710 and 1.3740. Today’s Range 1.3640-1.3740

Markets in Brief
It is no secret that President Trump is not very happy with Fed Chair Jerome Powell’s stewardship of the American economy. Trump is constantly belittling and disparaging Mr. Powell because the Fed will not lower rates in the face of inflation uncertainty due to Trump’s tariffs. Powell just ignores him, which further infuriates the egomaniac. That prompted the President to leak reports that he is considering naming former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett as Powell’s successor by September or October, per Wall Street Journal.
The prospect of a shadow Fed would greatly weaken Powell’s authority for the remainder of his term and renew concerns about the neutrality of the institution.
Traders sold US dollars across the board, bought safe-haven bonds and currencies, and unnerved equity markets.

Data Distraction
Weekly jobless claims fell by 10,000 to 236,000 (forecast 245,000) which supports Powell’s wait and see approach. Durable Goods orders surged by 16.4% in May (forecast 8.5%), however US growth put a damper on things. GDP fell 0.5% y/y in Q1 (forecast -0.2%.)

Oil
WTI oil is trading with a negative bias in a 64.67–65.57 range and is in the middle of that band in NY. The Iran/Israel ceasefire negated fears of supply disruptions, which undermined gains, while ongoing China/US trade issues combined with Chinese demand for crude are weighing on prices. US crude inventories fell by 5.83 million barrels last week, according to the EIA.

Stock Taking
Wall Street closed flat while Asian equity indexes finished on a mixed note. Australia’s ASX 200 ended with a loss of 0.10% while Japan’s Topix posted a 0.81% gain. Hong Kong’s Hang Seng shed 0.61%.
European bourses bucked the trend and are higher, led by a 0.45% rally in the German DAX which is off its best-pre-US market open level. The French CAC 40 index is up 0.15% while the UK FTSE 100 index has turned a small gain into a loss of 0.29%. S&P 500 futures have gained 0.25%. Gold (XAUUSD) rose and sits at 331.36 as of 5:45 am PDT.

EURUSD
EURUSD rallied hard and sits at 1.1721 after climbing from 1.1654 to 1.1745 overnight. Trump’s comments about naming Powell’s successor early, combined with hopes for Eurozone stimulus after NATO committed to 5% defense spending, supported prices. German consumer confidence soured slightly (GfK consumer confidence survey actual -20.3, previous -20), but traders did not care.

GBPUSD
GBPUSD bulls jumped all over the report that Trump is contemplating naming Powell’s successor about six months earlier than required and rose from 1.3655 to 1.3765. It is trading at 1.3745 in NY. GBPUSD dropped below the 1.3745–60 area on October 29, 2021, and other than a brief test of those levels about a month later, it has not seen the level since. At the moment, broad-based US dollar weakness is overshadowing rising UK debt costs.

USDJPY
USDJPY traded negatively in a 143.75–145.27 range and is trading near the low in early NY. Trump’s comments about naming Powell’s successor as early as September sparked a stampede into safe-haven yen trades, as it would weaken the Fed. The lower 10-year Treasury yield, which fell from 4.40% on Monday to 4.28% today, also weighed on prices. Japan’s Economic Minister is expected to be in Washington today to talk trade.

AUDUSD
AUDUSD resumed rallying overnight, rising from 0.6505 to 0.6550 due to improved global risk sentiment and Trump’s Fed Chair plans. The rally stalled ahead of this morning’s US data dump and lingering concerns for a 25 bp RBA rate cut in July.

NZDUSD
NZDUSD mirrored AUDUSD moves, rising from 0.6030 to 0.6074, thanks to a shift to a global “risk-on” tone following the Iran/Israel ceasefire. Lingering support from a widening of New Zealand’s trade surplus is also underpinning prices.

USDMXN
USDMXN extended this week’s losses and dropped to 18.8657 from 18.9757 due to widespread US dollar selling and improving US/Mexico trade talks. Bloomberg reported that both sides are negotiating a steel quota system. If it all goes well, Mexican steel imports to the US would face a 10% tariff on 88% of the total, which is down from 50%. Mexico’s trade surplus widened to $1.092 billion from a deficit of $0.088 billion in May. Banxico is widely expected to cut its benchmark rate by 50 bps today.

USDCNY
PBoC fix: 7.1620 vs exp. 7.1561 (prev. 7.1668)
Shanghai Shenzhen 300 fell 0.36% to 3946.02
Citibank analysts hiked their forecast for 2025 China GDP growth to 5.0% from 4.7%.

FX High, Low, Open (as of 6:00 AM ET)

FX data source: Yahoo Finance / Bloomberg / OANDA. Charts: Insert image or URL if applicable.