July 4, 2025

USDCAD open 1.3591, overnight range 1.3567-1.3596, close 1.3582

USDCAD jumped to 1.3624 from 1.3588 yesterday, in the wake of the US nonfarm payrolls report showing America gained 147,000 jobs in June, rather than 110,000 as forecast. In addition, the lower-than-expected jobless claims number (233,000 vs forecast 240,000) and a ISM Services PMI beating guesstimates eliminated any hope that the Fed would cut rates in July. However, traders are still expecting 3 Fed rate cuts by year end.

WTI oil prices traded lower in a 66.05-67.18 range and sit at 66.44 in NY. Gains are capped by expectations for another Opec production increase announcement and rising US crude inventories.

There are no Canadian or US economic releases today and with American markets closed, USDCAD trading will be very light.

USDCAD Technical Outlook:

The intraday technicals are bearish while trading below 1.3630 and looking for a break below 1.3550 to extend losses to 1.3510.  A move above 1.3630 will lead to a test of the 1.3670-1.3710 area.

The longer-term downtrend from February is intact while prices are below 1.3880 and looking for a break of support at 1.3510 to extend losses to 1.3420.

For today, USDCAD support is 1.3550 and 1.3520.  Resistance is 1.3620 and 1.3650. Today’s Range 1.3560-1.3630.

Independence Day Fiction

Today, US markets are closed. Americans call it Independence Day, but, just like a Trump speech, it is hyperbole and inaccurate. On July 4, 1776, the Declaration of Independence was adopted by the Continental Congress, and it was only signed by two people—John Hancock and Charles Thomson. The formal signing of the document occurred on August 2, 1776, when 50 of 54 delegates met in Philadelphia.

However, those signatures did not make America independent—it was just wishful thinking because they were ruled by Britain. Independence didn’t come until September 3, 1783, with the signing of the Treaty of Paris that ended the Revolutionary War, which forced Britain to recognize the United States of America as a sovereign nation.

Diplomatic Extortion

President Trump admitted that negotiating 170 trade agreements simultaneously was a tad difficult, so he has changed tactics—beginning today, the US will send letters to countries exporting to the US (they are no longer trade partners). The letters will go to 10-12 countries at a time and announce preset tariff levels of 10-20% or 60-70%. The following is an example of the letter:

To Rip-off Artists

Starting immediately, there will be a beautiful 10% or 20% tariff on every single item you try to sneak into the U.S.—maybe more, I dunno. Consider it a cover charge for access to the best market on Earth. Don’t like it? Build a factory here, hire some Americans, and maybe I’ll think about waiving the fee (but probably not). Call it a tax, a toll, or just good business—either way, you’re paying for the privilege. You’re welcome.

—DJT

Taking Stock

Asian equity indexes stayed close to home. Australia’s ASX 200 and Japan’s Topix closed on a flat note, while Hong Kong’s Hang Seng lost 0.64%.

European bourses are fearing the onslaught of Trump tariffs and are trading negatively. The French CAC is down 0.99%, followed by a 0.70% decline in the German Dax and a 0.23% drop in the UK FTSE 100 index. S&P 500 futures are down 0.63% while  Gold (XAUUSD) is trading at 3335.44and the US 10-year Treasury yield is 4.328%. as of 5:30 am PDT.

EURUSD

EURUSD attempted to recoup yesterday’s losses and traded with a bit of a bid in a 1.1753-1.1786 range. Gains are limited as the EU faces a Trump-imposed, July 9 trade deal deadline or risk an increase in tariffs on US exports to 50%. Traders ignored weaker-than-expected Eurozone PPI data (actual -0.6%, forecast -0.5%) and German factory orders (actual -1.4% vs April -1.6%).

GBPUSD

GBPUSD traded quietly in a 1.3645-1.3682 range. UK Construction PMI ticked up to 48.8 from 47.9, which S&P Global described as the slowest decline in construction output since January. GBPUSD gains are limited following yesterday’s stronger-than-expected US employment data which supports Fed Chair Powell’s wait-and-see approach to US interest rates.

USDJPY

USDJPY traded defensively in a 144.18-144.98 range as it gives back yesterday’s post-NFP gains. The prospect of steady US interest rates for longer combined with the rally in the US 10-year Treasury yield from 4.185% on Monday to 4.322% today is supporting prices.

AUDUSD

AUDUSD traded in the 0.6549-0.6580 range, which has contained price action all week. The cooling of US rate cut ardor after yesterday’s US data dump has limited gains while hopes for a China/US trade deal support the downside.

NZDUSD

NZDUSD drifted in a 0.6058-0.6082 range, garnering support from recent better-than-expected China data and speculation for a less dovish RBNZ.

USDMXN

USDMXN is trading with a negative bias in an 18.6234-18.6703 band. The passage of Trump’s Big Beautiful Bill sparked US dollar selling because it sharply increased US government debt, and USDMXN dropped in concert. Mexico consumer confidence is released today.

USDCNY

PBoC fix: 7.1535 vs exp. 7.1688 (Prev. 7.1523)

Shanghai Shenzhen 300 rose 0.36% to 3982.20

FX High, Low, Open

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