July 24, 2025
USDCAD open: 1.4080, overnight range 1.4066-1.4107, close 1.4085
USDCAD traded sideways, albeit with a bid, overnight. News of Trump’s latest tariff stunt was greeted with indifference because he has been lobbing tariff bombs at the country all year.
Slightly narrowing CAD/US interest rate differentials are acting as a minor headwind to USDCAD gains but but the threat of US escalation against Iran this weekend is limiting losses.
WTI oil remain bid in a 88.75-92.81 range due to concerns Trump may follow through on his threat to escalate attacks on Iran. The disruption of shipping through the Bab-el-Mandeb Strait by the Houthi’s is adding to oil price pressures. JPMorgan analysts predict that every month oil supplies are disrupted adds another $7.00/b to Brent.
Canadian Industrial product prices fell 1.4% m/m compared to a gain of 1.4% in May. The Raw Material Price index dropped 6.9% (forecast -1.5%, May 0.5%) The New housing price index fell 0.1% (forecast -0.2%, previous -0.3%).
On tap: S&P Global Manufacturing PMI and new home Sales.
USDCAD Technical Outlook
The intraday USDCAD technicals are neutral, consolidating in a tightening range between 1.4060 and 1.4120. A decisive break below 1.4060 opens the door to the rising trendline off the July 20 low near 1.4000, while a break above 1.4120 targets the July high near 1.4200.
Longer term, USDCAD remains in an uptrend from the spring low, holding well above the 100-day and 200 day moving averages.
For today: USDCAD support is at 1.4060 and 1.4030. Resistance is at 1.4120 and 1.4150.
Today’s expected range is 1.4060-1.4150
FX Heat Map
FX open high low 6:00 am
Trump Announces New Tariffs
Trump has spent the better part of the last 12 months announcing, then repudiating, then re-announcing various trade deals, agreements, frameworks and Memorandums of Understanding. The announcements were framed as historic. And as of today, it’s like they never happened.
Trump proclaimed (announcing is too pedestrian) a new slew of tariffs on 60 countries for “the Failure of Each Economy to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor.”
The legality of the move is questionable, and many cynics believe the tariffs were announced to deflect American voters’ attention from soaring fuel prices because he has bungled his Iran attacks.
Taking Stock
Asia equity indexes turned risk negative after Wall Street closed with steep losses. Japan’s Topix lost 1.05%, the Hong Kong Hang Seng closed down 0.98% and Australia’s ASX 200 fell 0.75%.
As of 5:30 am PT, European bourses are in positive territory thanks to modestly cooling oil prices. The German Dax is up 0.79%, the French CAC-40 has gained 0.42% and the UK FTSE 100 index has climbed by 0.36%. S&P 500 futures are up 0.28%, the 10-year Treasury yield is 4.676%, the DXY is 101.45 and gold is 4,055.63.
EURUSD | Range 1.1370-1.1401
EURUSD is trading near the bottom of its overnight range after the ECB’s hawkish hold failed to provide lasting support. The central bank left rates unchanged at 2.25% as expected but signaled upside risks to inflation and downside risks to growth. Some members had favored a hike today, and a September rate hike is now almost fully priced in. However, high energy prices are weighing on European growth prospects. News that the US levied tariffs on 60 countires also did not help the inflation picture. July flash PMIs were a tad higher than expected but the tariff news muted the response.
GBPUSD | Range 1.3306-1.3345
Sterling is suffering from higher oil prices, modest U.S. dollar safe-haven demand, cooling inflation, and ongoing political drama due to fiscal uncertainty. Markets now price a further 75bp of tightening from the Bank of England, which seems excessive but is hard to fight unless energy prices turn sharply lower. UK GfK Consumer Confidence for July improved to -17 vs. -21 expected (prev. -23), though this did little to support the pound. UK Retail Sales got a boost from nice weather and the World Cup.
USDJPY | Range 163.65-163.94
USDJPY flirted with 164.00 before drifting back to 163.73 in early NY trading. The currency pair is underpinned by higher crude prices and rising U.S. Treasury yields, with the 10-year yield hitting an 18-month peak of 4.71%. Japanese CPI data and PPI data met or slightly exceeded expectations, but the news had little impact due to Trump’s tariff salvo.
AUDUSD | Range 0.6964-0.6996
The Australian dollar got a bit of a boost when Manufacturing PMI came in at 51.7 (June 51.5) and Services PMI rose to 53 from 50.5. However, the gains were hammered by Trump’s tariff barrage and ongoing Middle East tensions.
USDMXN | Range 17.4679-17.5238
USDMXN traded sideways, torn between global risk aversion and Trump’s tariffs. Yesterday, Mexico headline inflation came in at 0.07%, which beat the forecast of 0.1% but was worse than the -0.11% previously. Today, Mexico’s jobless rate ticked up to 2.9% in June (May 2.8%) but the news had little impact on trading. Mexico’s Economy minister said that the country would see no change in the effective tariff rate following Trump’s proclamation. Time will tell.
CHINA
- PBoC Fix: 6.7939 vs exp. 6.7795 (prev. 6.7906)
- Shanghai Shenzhen CSI 300 fell 1.67% to 4,649.19
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
