August 7, 2025
USDCAD open 1.3733, overnight range 1.3722-1.3747, close 1.3741
USDCAD is under pressure as improved risk sentiment because of hopes that a Russia/Ukraine ceasefire will be announced soon. That’s because a Putin/Trump meet is supposed to happen in the “next few days,” somewhere in Europe. After Trump’s surprise 39% tariff bomb on Switzerland, its unlikely the sit-down will occur in that country.
Ontario Premier Doug Ford is warning Prime Minister Mark Carney that he thinks Trump will demand to renegotiate the USMCA-trade deal ahead of schedule, maybe even as early as November. He is probably right and if so, USDCAD downside is extremely limited.
Tuesday, Trump complained that JPMorgan and Bank of America declined his “business “after his first term as President because they discriminated against conservatives. Bank executives didn’t respond (but should have) and say, “it wasn’t your politics, it was your ethics as you are a really dodgy person.”
WTI oil traded softly in a 64.13-65.11 range. The combination of Saudi Arabia agreeing to Trump’s demand to boost production and the weak US dollar are weighing on prices. A decisive breach of support at 63.40 targets 60.00.
US weekly jobless claims rose to 226,000 (forecast 221,000 vs last week 218,000). Canada’s Ivey PMI data is later today-(forecast 55.2, previous 53.2)
USDCAD Technical Outlook:
The intraday technicals are bearish below 1.3750 and looking to break support at 1.3710 to extend losses to 1.3670. A move above 1.3750 negates the downside risk.
Longer term, USDCAD technicals are modestly bearish while trading below the 100-day moving average at 1.3835. The RSI is trending lower, but ADX shows a lack of conviction. A decisive breach of 1.3640 targets 1.3600 while a break above 1.3835 shifts the focus to 1.4000.
For today, USDCAD support is 1.3710 and 1.3680. Resistance is 1.3750 and 1.3790. Today’s Range: 1.3710-1.3790.
Tariff Day
The TACO trade failed—Trump followed through on his promise to impose tariffs effective today, and India, Switzerland, and Canada face the brunt of his wrath. Swiss President Karin Keller-Sutter flew to Washington yesterday in hopes of being granted an audience with Trump—but to no avail. An Indian official said, “We reiterate that these actions are unfair, unjustified and unreasonable.” Trump just smiled as he ate a bowl of curry.
“Let’s Talk”
Trump’s plan to hike tariffs on any country buying Russian crude was enough to get Putin to agree to a meeting with the US President in the next few days, somewhere in Europe. Trump is reportedly planning to name a replacement for FOMC member Adriana Kugler. The WSJ reports that the replacement will just be a short-term appointment, rather than nominating someone who would be Powell’s replacement.
Taking Stock
Asian equity markets finished the session on an upbeat note, led by a 0.72% gain in Japan’s Topix. Hong Kong’s Hang Seng rose 0.68% while Australia’s ASX 200 was flat. European bourses are sharply higher thanks to hopes for a Russia/Ukraine ceasefire. The German Dax has risen 1.65% followed by the French CAC-40 with a 1.10% gain. The UK FTSE 100 index is down 0.85% after the BoE cut interest rates by 25 bps. S&P 500 futures are up 0.62%, helped by Apple’s plans to invest $100 billion in US and avoid semiconductor tariffs. The US 10-year Treasury yield is 4.22% and the US dollar index (DXY) is 98.16. Gold (XAUUSD) is 3375.98. The US dollar Index (DXY) is 98.19, as of 5:30a.m.
EURUSD
EURUSD traded in a 1.1650–1.1698 range and is at 1.1666 in NY. The single currency is underpinned by optimism around the upcoming Trump/Putin talks. The gains occurred despite the latest German Industrial Production data which fell 1.9% m/m and downward revisions to the May data. The intraday EURUSD technicals point to further gains to 1.1770 while above 1.1600.
GBPUSD
GBPUSD popped to 1.3436 after trading in a 1.3346-1.3380 range prior to the BoE monetary policy decision. The BoE cut rates by 25 bps to 4.0% in a 5-4 decision. One voter wanted a 50-bps cut. They justified their action by citing ongoing, albeit uneven, disinflation and a loosening labour market marked by rising unemployment and slower wage growth.
USDJPY
USDJPY traded in a 146.69–147.71 range with demand seen after the spread between 10-year JGB/US Treasury yields widened. However, gains were slowed due to US dollar selling pressure as risk sentiment improved. China’s better-than-expected trade data
AUDUSD
AUDUSD extended yesterday’s gains in a 0.6496–0.6542 range. Prices were underpinned by a report showing Australia’s trade surplus widened to $5.36 from the forecast of $3.2 billion and news of China’s better-than-expected trade data.
USDMXN
USDMXN traded defensively in an 18.5904–18.6141 band as improved global risk sentiment and increased odds of Fed rate cuts overshadowed Trump’s Mexican tariffs. Mexican inflation cooled to 0.27% m/m from 0.28%. The intraday technicals are bearish while prices are below 18.6500. Banxico is expected to announce a 25 bp rate cut to 7.75%.
USDCNY
PBoC fix: 7.1345 vs exp. 7.1709 (Prev. 7.1409)
The Shanghai Shenzhen CSI 300 rose 0.03% to 4114.67
China July Trade surplus $98.24 billion (forecast $105.0 b, previous $114.77 b)
Exports rose 7.2% (forecast 5.4%, June 5.8%) and Imports -4.1% (forecast -1%, June 1.1%)
Rising shipments to Africa, Europe and Latin America offset the decline in shipments to the US.
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics
