July 22, 2025

USDCAD open 1.3678, overnight range 1.3675-1.3695, close 1.3682

USDCAD traded lower due to broad-based (but marginal) US dollar weakness. Provincial and federal leaders are meeting to discuss ways of alleviating economic risks from Trump’s trade war but resigned to the fact that tariffs will be a fact of life.

The Bank of Canada’s Business Outlook Survey (BOS)and Canadian Survey of Consumer Expectations (CSCE) were released yesterday.  The BOS survey was stale on release as the survey was conducted between May 8 and May 28. The conclusion that the worst-case scenario envisioned last quarter was less likely to occur was invalidated since Trump’s July 10 announcement of a tariff increase to35% on all import not covered under the US Mexico Canada trade deal.

The CSCE reported a majority of consumers were cutting back on US products and vacations which has annoyed Trump. US Ambassador to Canada Pete Hoekstra said Trump thinks Canadians are nasty and avoiding US products and US travel “don’t send positive signals.” Canadians think that Trumps attempt to destroy the Canadian economy is not much of a positive signal, either.

It’s a nothing day for traders except around the 10:00 am option expiry window when $2.5 billion of 1.3630-35 strikes and $1.1 billion of 1.3710-20 strikes expire.

USDCAD Technical Outlook:

The intraday technicals are moderately bearish while trading below 1.3710 and are looking for a move below 1.3650 to target 1.3610.  A break above 1.3730 shifts the focus to 1.3790.

Longer term, USDCAD is trading with a modestly bearish bias inside the well-established 1.3530-1.3800 trading range that has been intact since the beginning of June.

For today, USDCAD support is 1.3650 and 1.3610.  Resistance is 1.3710 and 1.3750.  Today’s Range 1.3610-1.3710

Dog Day’s of Summer-Markets on Mute-AC on Max

“Hot town, summer in the city, markets are slow and traders are gritty.” Trump’s August 1st tariff deadline is nearing, and many nations are looking at how they can appease the “great man” while preserving their economies and their dignities. The UK deal set the bar—bend over and grab your ankles, but most other leaders have greater self-respect.

Attention is also diverted to Trump’s overt bid to oust Fed Chair Jerome Powell. Trump needs lower interest rates to help fund the $3.4 trillion debt (Congressional Budget Office estimate) increase caused by his “big, beautiful bill.” Trump can only fire the Fed Chair for cause, so he and his cronies are trying to invent a cause by framing Powell over Fed HQ renovations that are over budget. Mr. Powell is giving the opening remarks at the Integrated Review of the Capital Framework for Large Banks Conference in Washington at 8:30 a.m.

Taking Stock
Yesterday’s Wall Street session ended with the Nasdaq posting a record close and the S&P 500 finishing above 6,000 for the first time. Asian equity indexes gave up early gains but closed in positive territory. Australia’s ASX 200 finished with a 0.10% gain, Japan’s Topix closed flat, and the Hong Kong Hang Seng gained 0.54%.

European traders are feeling less chipper, and the main bourses are negative, led by a 1.20% drop in the German Dax. The French CAC 40 is down 0.84% while the UK FTSE 100 is flat. S&P 500 futures are flitting either side of unchanged, while the US 10-year Treasury yield traded sideways in a 4.365–4.396% range. Gold (XAUUSD) is off its session low and is trading at 3401.16 as of 5:40 a.m. PDT.

EURUSD
EURUSD is trading at the top of its 1.1682–1.1710 range, underpinned by hopes for an EU/US tariff deal and by a somewhat softer tone to the US dollar vs. the majors. The EU and US have a $1.97 trillion trade relationship, but despite that, Trump plans to impose a 30% tariff on imports of EU goods. The EU is far from defenseless and could use the Anti-Coercion Instrument (ACI) to counter US tariffs. If 15 of the EU countries representing 65% of the population agree, they can impose counter tariffs along with export and import restrictions, as well as restrictions on intellectual property rights and foreign direct investment. They could also ban rich Americans from holding weddings in European cities like Venice. US trade negotiators are well aware, which is why an EU/US tariff deal is likely.

GBPUSD
GBPUSD dawdled in a 1.3462–1.3500 range and is trading at 1.3487 in NY. Prices are supported by lower UK and global bond yields, which serve to calm unsettled gilt markets. The short-term technicals are bullish, with the break above 1.3450 negating the downtrend from the beginning of July and shifting the focus to 1.3620.

USDJPY
USDJPY is in the middle of its 147.25–147.95 range. Japanese traders returned from a long weekend and are digesting the news that Prime Minister Ishiba lost his majority and how it will affect US and Japan trade talks.

AUDUSD
AUDUSD traded sideways in a 0.6504–0.6531 range, with price action tracking broad US dollar sentiment. The RBA minutes revealed that policymakers feared inflation was actually higher than what the data showed and that upside risks to the global economy were why they left rates unchanged. The minutes also noted that members expect to cut interest rates again this year.

NZDUSD
NZDUSD drifted in a 0.5941–0.5975 range in an uneventful session, with gains limited by RBNZ rate cut expectations in August. New Zealand posted a $142 million trade surplus in June, well below the forecast of $1.05 billion.

USDMXN
USDMXN bounced in a narrow 18.6642–18.7008 range as it consolidated yesterday’s losses. Mexican retail sales rose 1.8% m/m in May compared to a drop of 1.0% in April.

USDCNY
PBoC fix: 7.1460 vs. exp. 7.1635 (Prev. 7.1522).
Shanghai Shenzhen 300 rose 0.82% to 4118.96.

Chinese authorities are hoping EU officials will remove tariffs targeting Chinese EV’s at Thursdays meeting with EU President Ursula von der Leyen, European Council President Antonio Costa and Chinese Premier Li Qiang.

Bloomberg reports “Trump’s strategy of pressuring China by imposing trade restrictions on its partners within global supply chains risks undermining China’s economic growth and a significant portion of its U.S.-bound exports.

If he succeeds in cracking down on transshipments—whether through steeper tariffs or stricter sourcing rules—up to 70% of China’s exports to the U.S. could be at risk, potentially impacting more than 2.1% of the nation’s GDP.”

FX High, Low, Open

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau