May 13, 2026
USDCAD open: 1.3702, overnight range 1.3684-1.3711, close 1.3699
USDCAD drifted higher but remained within its well-travelled range as overnight FX activity was somewhat muted. The pair remains bid after yesterday’s US inflation report supported a hawkish outlook for US interest rates. Kevin Warsh has been confirmed as a Fed governor and is expected to be confirmed as Chairman today.
Things are looking better for Canada’s energy sector. The Globe and Mail reports that Carney and Alberta are close to a deal that rolls back the Trudeau-era carbon pricing scheme. Instead of a carbon price of $170/tonne by 2030, it is now $140/tonne by 2040. Former Environment Minister Stephen Guilbeault is outraged, which means the new measures must be wonderful.
WTI oil prices are at the top of their $100.57-$102.39 range due to the ongoing closure of the Strait of Hormuz. The International Energy Agency (IEA) now estimates that the global market will be severely undersupplied through the end of Q3 2026, even if the Iran-US war ends in June.
US PPI data came out hot, hot, hot. PPI, ex food and energy surged 5.2% y/y (forecast 4.3%, March 4.0%) while monthly core PPI rose 1% m/m compared to the estimate of 0.2% and the March result of 0.2%. The data may not trigger a rate hike but it may glue US rates to current levels.
USDCAD Technical Outlook
The intraday technicals are bullish while trading above 1.3660 and are looking for a decisive break above 1.3720 to target 1.3750. A move below 1.3660 suggests a retest of 1.3610.
The medium-term technicals are bullish inside a 1.3650-1.3750 range. The daily momentum indicators are neutral.
For today, USDCAD support is at 1.3670 and 1.3630. Resistance is at 1.3720 and 1.3740. Today’s range: 1.3640-1.3720.
FX Heat Map as of 6:00 am ET
FX Heat FX open high low 6:00 am
Mr Trump Goes to Beijing
Air Force One just landed in Beijing for a supposedly high stakes mission with tariff cuts of around $30 billion on the agenda. Trump needs a win but Beijing does as well. However, China’s strangelehod on rare earth minerals, and Trumps Iranian quagmire suggest Xi Jingping has the upper hand.
Taking Stock
Asian equities got another injection of AI optimism from Korea and closed with gains except for Australia’s ASX 200 which fell 0.46%. Japan’s Topix rose 1.20% and Kong’s Hang Seng rose 0.15%.
As of 5:35 am PT, the German DAX is up 0.61%, the French CAC 40 is down 0.37% and the UK FTSE 100 is flat. S&P 500 futures are up 0.15%, the 10-year Treasury yield is 4.477%, the DXY is 98.54, and gold (XAUUSD) is 4,680.15.
EURUSD | Range: 1.1696-1.1742
EURUSD is near the bottom of its overnight range. Traders were not thrilled to hear ECB Governing Council Member and Finland Central Bank Governor Ollie Rehn warning of economic sdata starting to point to stagflation. ECB’s Francoi Villeroy said he is waiting for more data to confirm if a rate hike is needed. Rising energy costs are to blame. Eruozne GDP and Employment were unchanged in Q1.
GBPUSD | Range: 1.3495-1.3552
GBPUSD is suffering from political angst due to ongoing calls for Prime Minister Keir Starmer’s resignation with some anlaysts fretting about the risks of Liz Truss” moment.The reaction is probably exaggerated due to low FX volatility as traders shift their attention from Trump and Iran to Trump and China.
USDJPY | Range: 157.57-157.90
USDJPY trikcled higher in a rather calm overnight session. Prices were underpinned by the rise in crude prices. For today and tomorrow the geopolitical focus has shifted from Iran to Trump’s China visit. Japan’s March current account surplus was ¥4.7 trillion, boosted by strong semiconductor and electronic component exports alongside robust direct investment income.
AUDUSD | Range: 0.7231-0.7248
AUDUSD is steady in a quiet range. Last week’s RBA rate hike helped to offset a firming US dollar on hawkish Fed expectations after yesterday’s hotter than expected US inflation numbers. The domestic data calendar was busy but offered little support. The Q1 Wage Price Index rose 0.8% on the quarter, in line with expectations, but the annual pace eased to 3.3% from 3.4%.
USDMXN | Range: 17.2042-17.2468
USDMXN traded sideways as price action tracked the broad US dollar movements. The currency didn’t really react to news that S&P Global Ratings downgraded Mexico’s long term debt to negative from stable. The finance Ministry slashed its 2026 GDP forecast to 2.3% from 3.0%.
China
- USDCNY Fix: 6.8426 vs exp. 6.7945 (prev. 6.8467).
- Shanghai Shenzhen CSI rose 1.02% to 4,998.34
Chinese officials believe they are on much stronger footing to deal with Trump then they have been in the past. Trump needs China’s help to reign in Iran and Russia as well as improving access to rare earth minerals. Taiwan my be the price of China’s cooperation.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
