May 2, 2025
USDCAD: open 1.3811, overnight range 1.3803-1.3858, close 1.3856
USDCAD is directionless but trading with a negative bias with price action tracking the prevailing US dollar sentiment. The currency got a bit of good news yesterday when the Trump administration decided against slapping tariffs on auto parts. The politicians may have been motivated to avoid trashing the American auto industry after GM’s CEO Mary Bara said the tariffs would cost the company between $4 and $5 billion.
WTI rallied from yesterdays low of 56.45 to 59.86 overnight before retreating to 58.68 in NY. The gains were mostly due to profit-taking ahead of the weekend and todays NFP data. Traders were also cautious ahead of the May 5 Opec Ministers meeting.
There are reportedly $800 million of option strikes between 1.3790-00 expiring at 10 am, with another 1.5 billion of 1.3825-50 strikes maturing.
There are no Canadian economic reports today.
USDCAD Technicals
The intraday USDCAD technicals are mildly bullish following the failure to break below key support in the 1.3770 area (#rd Std Deviation Bollinger band) which is guarding the 78.6 Fibonacci retracement level at 1.3722. Both RSI and MACD indicators are suggesting an upside bounce targeting the 1.3950 area.
Longer term, the USDCAD downtrend remains intact supported by the prices below the 100- and 200-day moving averages.
For today, USDCAD support is at 1.3770 and 1.3740. Resistance is at 1.3860 and 1.3910
Today’s Range: 1.3770-1.3970
Chart: USDCAD daily.
FX at a Glance
Good Payrolls Data
Analysts said todays US employment report is evidence of US exceptionalism after America gained 177,000 jobs in April, easily beating the forecast of 130,000. They dismissed the downgrade in the March results from 228,000 to 185,000. The unemployment rate remained unchanged at 4.2%. The initial reaction was to buy US dollars but that move was quickly reversed.
Chillin’ Out
China is still enjoying a Labour Day break but not everyone. The Commerce Ministry claimed to be assessing the possibility of US trade talks, noting that many senior US officials have expressed a willingness for a dialogue. (So much for Trump’s vow that China had to call first). Bloomberg quoted the Ministry statement: “The US has recently sent messages to China through relevant parties, hoping to start talks with China. China is currently evaluating this.”
Tariffs Taking a Bite out of Earnings
Apple (AAPL: Nasdaq) and Amazon (AMZN: Nasdaq) admitted tariffs were having an negative effect on earnings and both stocks fell in after-hours trading, Asian equity traders liked the news about an ease in trade tensions between the US and China. Australia’s ASX 200 rose 1.13%, Japan’s Topix rose 0.31% and the Hong Kong Hang Seng gained 1.74%. European bourses followed suit and got an added lift from positive tariff talk and a bigger boost after the US NFP numbers. The German Dax is up 1.78, the French CAC 40 has climbed 1.53% and the UK FTSE 100 up 0.95%. S&P 500 futures jumped from 0.5% to 0.98% post NFP. while the US dollar index (DXY) is down 0.44%. Gold (XAUUSD) is 3256.55, and the US 10-year Treasury yield popped to 4.28% from NY open of 4.21%.
EURUSD
NY Open: 1.1350, Overnight Range: 1.1275-1.1355
EURUSD climbed steadily in Asian and Europe with prices underpinned by better-than-expected economic data and positive developments on the tariff front. Eurozone Manufacturing PMI ticked up to 48.4 from 48 last month, which was the fastest pace in nearly three years. Hamburg Commerce Bank Chief Economist Cyrus de la Rubia said the result was a sign that the situation was stabilizing. The EU trade commissioner Marcos Sefcovic opined about EU countries buying an additional $56 billion of US goods as a way of appeasing the Americans. EURUSD remains bearish below 1.1370 and looking for a move below 1.1270.
GBPUSD
NY Open: 1.3310, Overnight Range: 1.3274-1.3322
GBPUSD is firmer but well below its peak of 1.3444 this week partly because the UK is not a top-priority country for US trade negotiators. Traders are looking ahead to next thrusday’s Bank of England monetary policy meeting and the expected 25 bp rate cut.
USDJPY
NY Open: 144.57, Overnight Range: 144.44-145.92
USDJPY climbed toward 146.00 before retreating quickly. There are reports that Japan was not impressed with the US trade proposal. And Japan is considering playing hardball with the Americans. Finance Minister Katsunobo Kato broached the subject of using Japan’s $1.0 trillion in US Treasury holdings as leverage in negotiations when he was asked about such a tactic by reporters. He said “we obviously need to put all cards on the table in negotiations. It could be among such cards.”
AUDUSD
NY Open: 0.6442, Overnight Range: 0.6375-0.6445
AUDUSD shrugged off weaker than expected March retail sales data (actual 0.3%, forecast 0.4%, previous 0.8% m/m) and rallied on news that China and the US may finally start trade negotiations. Australians are poised to re-elect Prime Minister Anthony Albanese with a bigger majority on Saturday.
NZDUSD
NY Open: 0.5945, Overnight Range: 0.5903-0.5949
NZDUSD rallied alongside AUDUSD due to hopes China and the US begin trade talks.
USDMXN
NY Open: 19.6608, Overnight Range: 19.5487-19.6734
USDMXN erased yesterdays gains and made a new high for the week in early NY trading after the US dollar caught a pre-NFP bid. Traders ignored Mexican President Sheinbaum’s comments that she and Trump agreed to continue work on the trade talks.
China Snapshot`
Markets Closed
PBoC fix: 7.2014 vs exp. 7.2670 (Prev. 7.2029).
Shanghai Shenzhen 300 fell 0.12% to 3770.57
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
