Agility Forex Daily Commentary
July 10, 2025
USDCAD open 1.3678, overnight range 1.3664-1.3696, close 1.3686
USDCAD traded narrowly overnight as traders downplay the possible negative results from Trump’s tariff letters, chalking them up to an Art of the Deal negotiating strategy—leverage. Markets are reacting as if they believe the August 1 tariff deadline is a phantom date.
Prime Minister Mark Carney is getting ready to partially unwind the massive government hiring during the Trudeau era. Carney told his ministers to find around $25 billion in budget savings, which implies civil servant job losses.
Some Americans are smoking mad at Canada. Six Republican Congress members complained via letter to the Canadian ambassador about smoke from Canadian wildfires ruining their summer. Canada responded (not really) about how the negative impact from lingering effects of US tornados and hurricanes ruin Canadians’ enjoyment of spring, summer and fall. Checkmate.
WTI oil traded in a 67.92–68.57 range, with the topside capped by yesterday’s EIA report of a 7.01-million-barrel increase in US crude inventories.
US weekly jobless claims rose 227,000, 8,000 less than expected which provides even more support to the cautious FOMC stance. Why cut rates? Inflation is tame, and the job market is healthy.
USDCAD Technical Outlook:
The intraday technicals are unchanged from yesterday. They are bullish above 1.3650 and are looking for a break above 1.3705 to extend gains to 1.3750. A break below 1.3650 targets support in the 1.3610-30 zone.
Longer term, USDCAD is looking for a test of 1.3750 which if broken points to further gains to 1.3950. Failure to break above 1.3750 suggest a drop to 1.3600.
For today, USDCAD support is 1.3650 and 1.3610. Resistance is 1.3705 and 1.3750 Today’s Range 1.3610-1.3710
No Taming of this Shrew
Trump’s latest tariff letter barrage included a nasty 50% tariff on Brazil, for trade and political reasons. The letter to Brazil President Luiz Inácio Lula da Silva blurs the line between legitimate policy disputes and personal or political grievances. While some concerns are well-founded, the blanket 50% tariff hike and linking it to former President Bolsonaro’s trial undermines credibility and likely violates WTO rules on many fronts.
Trump wasn’t done. The Brazil letter was one of seven issued yesterday, and he followed that up with an announcement about copper. “I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT.” Copper prices soared.
FOMC Minutes Confirm Powell’s View.
The FOMC minutes did not offer any surprises. They confirmed what Fed Chair Jerome Powell has been saying, which was policymakers will wait and see how tariffs impact prices.
“Can We Talk”
US Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov are meeting in Kuala Lumpur today. It has been 867 days since Putin launched his invasion of Ukraine, which he expected to be done and dusted in 30 days. Trump wants peace, but Putin still wants Ukraine.
Taking Stock
Asian equity markets closed on a mixed note in the wake of Trump’s second tariff letter barrage. Australia’s ASX200 rose 0.59%, Hong Kong’s Hang Seng gained 0.57%, while Japan’s Topix lost 0.56%.
European traders dismissed the tariff news. The UK FTSE 100 index led the pack higher with a 1.0% jump, followed by the French CAC 40, which rose 0.31%. The German Dax is and S&P 500 futures are flat. The US 10-year Treasury yield is steady at 3.35%. Gold (XAUUSD) is 3322.01, as of 8:30 am PDT
EURUSD
EURUSD drifted in a 1.1717-1.1750 range with the downside underpinned by hopes that the EU and US will reach some sort of trade framework with the US. EU officials are demanding auto tariffs be reduced, and in turn, they will agree to reducing some of their tariffs and accept auto import quotas. The US trade team aren’t thinking it through. The reason European car brands like VW, BMW, and Mercedes are in demand by Americans is that US manufacturers have a well-deserved reputation for building crap. Tariffs will just raise prices, not quality.
EU President Ursula von der Leyen won a no-confidence vote by 360 to 175, with 18 abstainers.
GBPUSD
GBPUSD flat-lined in a 1.3585-1.3620 range, garnering a bit of support after the FTSE 100 index hit another record high. The gains were mainly due to surging mining stocks after Trump’s 50% tariff on copper. UK investors do not seem concerned about the downside risks from Trump’s trade war.
USDJPY
USDJPY inched higher in a 145.76-146.47 band. Japanese June PPI rose 2.9% y/y, as expected, and a non-factor for traders. USDJPY is torn between safe-haven demand for yen and downgraded BoJ rate hike expectations.
AUDUSD
AUDUSD is feeling perky, rising from 0.6530 to 0.6565 following Trump’s 50% tariff announcement on copper. Traders are also feeling fairly risk-positive due to the TACO trade (Trump Always Chickens Out) and expect Trump to agree to more tariff delays beyond August 1.
NZDUSD
NZDUSD firmed in a 0.5997-0.6025 range due to improved risk sentiment and the recent decision by the RBNZ to leave rates unchanged.
USDMXN
USDMXN traded sideways in a 18.5950-18.6685 range because of general US dollar weakness. The minutes of the June 26 Banxico meeting are released today.
USDCNY
PBoC fix: 7.1510 vs exp. 7.1757 (Prev. 7.1541)
Shanghai Shenzhen 300 rose 0.47% to 4010.02
Speculation of new government aid for China’s beleaguered property market gave stocks a boost..
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance
