July 7, 2028
USDCAD open: 1.4216, overnight range 1.4202-1.4222, close 1.4206
USDCAD is spinning its wheels while ignoring news that Iran missiles hit a Qatari LNG ship travelling without its transponder and Axios reported two other ships had also been hit. Even so, the US/Iran ceasefire has held.
Canada’s magic money geyser has erupted. Old Fiscal Faithful spewed a $24 billion announcement for plans to purchase around 12 submarines from Germany. Meanwhile Alberta Premier Danielle Smith and Ontario Premier Doug Ford announced plans for a 3,300 km pipeline dubbed the Northern Shiled. No funding details were included.
The Bank of Canada Business Outlook Survey (BOS) and Consumer Expectations Survey showed Elevated consumer inflation expectations and rising business input costs limit the Bank of Canada’s room to cut rates, despite broader economic cooling. The caveat is that the survey was conducted before oil prices dropped from mid-$90’s to below $70.00/b today.
WTI oil prices ignored the latest Strait of Hormuz flareup and traded in a 68.62-69.74. Yesterday, Saudi Arabia’s Aramco announced a $11.00/b cut in the price of its crude sold to Asia which is now $1.50/b below the average for Oman and Dubai Asian prices.
Canada’s Trade surplus widened to $4.24 billion in May ($2.74 b in April). The US trade deficit widened to $77.6 b from 55.9 b in April
USDCAD Technical Outlook
The intraday USDCAD technicals are mildly bullish above the 1.4200 area. A decisive break above 1.4250 targets 1.4290, while a move below 1.4200 shifts the focus back to 1.4150.
The longer-term outlook remains bullish above 1.4150, where the ascending channel from the May low guards the broader uptrend, with the 200-day moving average rising at 1.3836. However, the daily RSI easing from extreme overbought levels alongside a marginally negative daily MACD histogram warns the corrective phase may not be complete. A close below 1.4150 unlocks a move to 1.4100, ahead of 1.4050. A recovery above 1.4250 negates the corrective setup and puts 1.4350 back in play.
For today: USDCAD support is at 1.4200 and 1.4165. Resistance is at 1.4250 and 1.4280 Today’s expected range is 1.4180-1.4250
FX Heat Map
FX open high low 6:00 am
All Eyes on NATO Summit
The NATO summit in Turkey is the main focus for traders due to Trump’s attendance. The US President achieved a victory by forcing European nations to start sharing the cost of their defense, which was mostly borne by American taxpayers. Trump comments and stated plans to reduce the US military footprint in the region has unnerved leaders and ignited an arms race.
Taking Stock
Greedy Asian equity traders knocked Samsung’s stock price down nearly 10% at one point after the company reported blow-out June earnings which topped forecasts by 6%. “Please sir, can we have more.” That price action fueled losses in Hong Kong’s Hang Seng which fell 0.51%, Japan’s Topix which lost 0.97%, and Australia’s ASX 200 which closed down 0.31%.
As of 5:30 am PT, European bourses are mixed. The French CAC is up 0.30%, UK FTSE 100 is up 0.56%, and the German Dax is down 0.59%. S&P 500 futures have dropped 0.10%, the 10-year Treasury yield is 4.483%, the DXY is 100.87, and gold (XAUUSD) is 4,163.52.
EURUSD | Range 1.1423-1.1449
EURUSD was adrift due to a lack of actionable economic data or headlines. Germany released Industrial production for May, which rose 0.9%, easily beating the forecast for a 0.2% gain. No one cared. The pending French court decision to determine if Marine Le Pen can run for office is not an issue for EURUSD, just France.
GBPUSD | Range 1.3369-1.3402
GBPUSD was steady and near the top of its overnight range underpinned by sales of EURGBP, higher stock prices, and slightly improved housing price data. The Lloyds House Price index rose 0.9% m/m compared to 0.2% previously. The Office of Budget Responsibility (OBR) warned the government would need to hike taxes or cut spending to prevent a debt spiral.
USDJPY | Range 161.68-162.18
USDJPY retreated after the government denied media reports that it was attempting to keep interest rates low as part of its fiscal expansion policy. The slide was also helped by steady crude prices which remained below pre-Iran war levels and a retreat in JGB yields.
AUDUSD | Range 0.6935-0.6961
Aussie is in the middle of its narrow overnight band. Topside gains were hampered by falling stock market prices and the flare-up of hostilities in the Strait of Hormuz. The recent inflation data has cooled expectations for further hikes, which is another drag on the upside.
USDMXN | Range 17.3748-17.4331
USDMXN was directionless, but the downtrend from June 25 remains intact. Prices appear to have found a floor in the 17.0010 area due to uncertainty on US-Mexico trade after the Americans opted to not extend the agreement. Inflation has cooled recently, which supports the case for Banxico easing.
CHINA
- PBoC Fix: 6.8054 vs exp. 6.7838 (prev. 6.8066)
- Shanghai Shenzhen CSI 300 fell 1.03% to 4,792.96
PBoC Governor Pan Gongshen said that China will support the launch of CNY-denominated commodity futures trading in Hong Kong
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview
