June 30, 2028
USDCAD open: 1.4236, overnight range 1.4200-1.4048, close 1.4210
USDCAD rose on the back of broad-based US dollar demand against the majors which is partly due to month-end portfolio rebalancing. The gains occurred despite improved risk sentiment due to renewed US and Iran peace talks as CAD/US interest rate spreads are limiting the benefit.
Canada’s economic growth rebounded more than expected, rising 0.5% in April (forecast 0.3%) It’s too early to uncork the champagne. Stats Canada’s forecast for growth in May is just 0.1%. And furthermore, on July 1, there will be an official announcement that the CUSMA deal will not be extended. That certainly will muddy the growth outlook in the second half of the year.
WTI oil prices traded in a 69.77-71.17 range ahead of the Iran US talks in Qatar. Trump’s bungled attack on Iran has sent US gas prices soaring and now Trump is demanding gas retailers cut prices because in his world, the two events are not related.
US consumer confidence and Chicago PMI reports will take a back seat to the JOLTS job openings data for May. (forecast 7.3 million vs 7.618 million in April.
USDCAD Technical Outlook
The intraday USDCAD technicals are bullish while trading above 1.4205, with a decisive break above 1.4260 targeting 1.4320. A break below 1.4205 suggests a retest of support at 1.4140. The daily RSI warns that USDCAD is extremely overbought and vulnerable to a correction.
The longer-term outlook is bullish above 1.4040 with a break of 1.4320 putting 1.4450 in play.
For today: USDCAD support is at 1.4200 and 1.4150. Resistance is at 1.4310 and 1.4360. Today’s expected range is 1.4210–1.4290.
FX Heat Map
FX open high low 6:00 am
More Talk, Another Ceasefire,
Five ships are making the transit of the Strait of Hormuz after negotiators from Iran and the US head to Qatar for another round of talks. The American position is down to “Man, ya gotta give me something,” after Secretary of State Marco Rubio told Congress that nuclear talks could fail. Iran is also asserting its sovereignty over the Strait, which was not an issue until Trump launched his attack. Nevertheless, the de-escalation of tensions has kept the focus on the upcoming nonfarm payrolls report on Thursday.
Q2 is ending with the MSCI All World equity index up over 15%, the US dollar index rising 1.9% and gold losing the most in a quarter since 2013.
Taking Stock
Asian equities closed mixed. Hong Kong’s Hang Seng fell 0.63% to finish the month down 8.54%. Australia’s ASX 200 lost 0.58% and ended June up 0.68%, while Japan’s Topix gained 0.32% overnight, and 1.05% in the month.
As of 5:40 am PT, European equity indexes are rallying. The German Dax is up 1.24%, the French CAC 40 has gained 0.21% and the UK FTSE 100 has risen 0.76%. S&P 500 futures are flat, the 10-year Treasury yield is 4.391%, the DXY is 101.41, and gold (XAUUSD) is 4,018.42.
EURUSD | Range 1.1383-1.1428
EURUSD trickled lower due to broad US dollar strength stemming from expected month end demand and into US employment data expected to support Fed rate hikes. German Retail Sales rose 1.1% m/m in May (forecast -0.1%) but the data was ignored.
GBPUSD | Range 1.3122-1.3262
GBPUSD has caught a bit of a bid while prices are above 1.3220 following today’s GDP data numbers which showed growth in construction, production and services. Prices were also underpinned by hopes that the latest US/Iran talks will bear fruit.
USDJPY | Range 161.89-162.41
USDJPY hit a four-decade high overnight and it is close to that level in early NY trading. Traders are waiting for BoJ intervention which has been threatened ever since USDJPY cracked above 159.00. Traders do not fear it because there are a host of other issues outside of the BoJ control which are supporting prices at current levels. Those include the Japanese government’s massive spending plans and a hawkish outcome from the June 17 FOMC meeting. All intervention will accomplish is to allow traders to buy USDJPY at “better levels.” Nevertheless, if the BoJ decides to act, the July 3, US holiday could give them their biggest bang for the buck because of reduced liquidity.
AUDUSD | Range 0.6865-0.6892
Aussie traded inched lower in the face of broad US dollar demand. The RBA minutes reiterated the need for restrictive monetary policy but it was old news and had no impact on trading.
USDMXN | Range 17.4536-17.5044
USDMXN is at the bottom of its overnight range underpinned by the conviction Banxico will not be cutting rates any time soon, leaving MXN/US interest differentials intact.
CHINA
- PBoC Fix: 6.8109 vs exp. 6.7877 (prev. 6.8175)
- Shanghai Shenzhen CSI 300 rose 1.07% to 4,979.43
NBS June Manufacturing PMI 50.3 (forecast 50.1, previous 50). Non-manufacturing PMI 50.2 (forecast 49.9, previous 50.1)
China and EU agree to maintain supply chain stability. EU Commissioner Sefovic called the talks, intensive and focused with the intent to rebalance trade with Beijing, saying the status quo is not an option.
US Retailers have reportedly front-loaded Black Friday and Christmas orders.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
