July 11, 2025
USDCAD open 1.3700, overnight range 1.3653-1.3731, close 1.3655
Bring it on, Donnie. Trump went after Canada again, levying a 35% tariff on imports of Canadian goods, even as the two nations are supposedly in tariff negotiations. His erratic actions, and late-night rants are very similar to symptoms of neurosyphilis which may have been a side-effect of his association and friendship with noted paedophile Jeffrey Epstein.
Trump also hinted that he may raise the base tariff to the 15-20% area. One theory is he is embarrassed by the TACO trade driving stock prices higher and wants revenge.
USDCAD spiked to the 1.3730-40 resistance area after Trump’s social media tweet but the entire rally was reversed in NY, after Canadian employment data. New jobs soared by 83,100 in June (forecast 1,000, previous 8,800) while the unemployment rate fell to 6.9% (forecast 7.1% vs previous 7.0%). Unfortunately, 70,000 of the new jobs were part-time.
Yesterday, Brazil was hit with a 50% tariff because, Trump doesn’t like the President Lula da Silva. Mr da Silva responded by saying his country does not need the US and will look for other trade partners. Hmm, if more countries adopted the same strategy…..
WTI oil consolidated yesterday’s losses in a 66.51-67.20 range, as escalating trade tensions, combined with Opec’s planned August production increase suggest weaker demand.
There are about $1.5 billion of 1.3635-1.3650 option strikes and another 1.3 billion of 1.3700-20 strikes expiring at 10:00 am today.
USDCAD Technical Outlook:
The intraday technicals are bullish above 1.3650 and looking for a break above the 1.3640-50 area to extend gains to 1.3800. A move below 1.3660 targets 1.3610 and then 1.3580.
Longer term, USDCAD is consolidating but still biased lower unless 1.3750 breaks cleanly, opening the door to 1.3950. Failure to crack 1.3750 suggests renewed pressure toward 1.3600 and then 1.3550.
For today, USDCAD support is 1.3650 and 1.3620. Resistance is 1.3750 and 1.3790 Today’s Range 1.3660-1.3760
FOMC Members are Cautious
A flurry of comments from FOMC members reinforced the Committee’s wait-and-see attitude although Fed Governor Christopher Waller wasn’t one of them. He continued to audition for Powell’s job by claiming the Fed’s policy is too tight, which is what Trump believes. So did San Francisco Fed President Mary Daly, who is open to a rate cut in September.
Chicago Fed President Austan Goolsbee disagrees, and he blames Liberation Day tariffs for the caution. He also said he doesn’t understand why the Fed should cut rates to make government debt cheaper, as its mandate is employment and inflation.
Taking Stock
Asian equity markets finished on a mixed note. Hong Kong’s Hang Seng closed 0.46% higher and Japan’s Topix gained 0.39%. Australia’s ASX 200 closed down 0.11%.
European traders suffered from weak data and escalating trade tensions after Trump appeared to have raised the base tariff rate to the 20% area.
Germany’s DAX is down 0.99% while the French CAC 40 has lost 1.07%. The UK FTSE 100 has shed 0.56%. S&P 500 futures are down 0.60% but the US 10-year Treasury yield is steady at 4.382%. Gold rose to 3353.69 from a low of 3322.04 as of 6:45 EDTAgil
EURUSD
EURUSD traded negatively in a 1.1665-1.1708 range, falling in Asia and consolidating the losses in Europe. Trump’s sudden tariff escalation against Canada, even as negotiations were ongoing, spooked EURUSD traders because the EU is also attempting to wrangle a deal with the Americans. The EU could be next as Trump promised a tariff letter today.
GBPUSD
GBPUSD dropped to 1.3529 from 1.3586 on the back of disappointing economic growth data. GDP fell 0.1% m/m in May (forecast +0.1%, previous -0.3%) while Manufacturing Production and Industrial Production reports were weaker-than-expected.
USDJPY
USDJPY rallied in a 146.14-147.16 range on the back of Trump comments to NBC News suggesting base tariffs could rise to the 15-20% range. Traders were unnerved because Japan and the US have not agreed to a trade deal due to auto tariff issues.
AUDUSD
AUDUSD is consolidating this week’s gains in a 0.6556-0.6596 range as it still derives support after the RBA surprised markets and left rates unchanged at this week’s meeting. Traders are also hoping for news of a new round of Chinese stimulus.
NZDUSD
NZDUSD is in the middle of its 0.6008-0.6043 range. Gains were capped after Business NZ PMI rose to 48.8 (from 47.4 previously) because it was still in contraction territory with four of the five main sub-index values in decline.
USDMXN
USDMXN popped from 18.6015 to 18.7133 and sits near the top of that range in NY. Trump’s tariff letter to Canada suggests that Mexico is also vulnerable to similar action.
USDCNY
PBoC fix: 7.1475 vs exp. 7.1771 (Prev. 7.1510)
Shanghai Shenzhen 300 rose 0.12% to 4014.81
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance
