May 14, 2025
USDCAD: open 1.3913, overnight range 1.3902-1.3941 close 1.3938
USDCAD retreated on the back of broad-based US dollar selling pressure after slightly softer-than-expected US inflation data yesterday. The sell-off continued overnight on optimism that with the US/China tariff tiff pause, the stage is set for a far more market-friendly risk environment. That may be an overly optimistic view.
USDCAD direction remains tied to broad US dollar sentiment and domestic issues are not a factor. Speaking of which, Prime Minister Mark Carney unveiled his new-look Cabinet with Francois-Philippe Champagne (Frankie Bubbles) as Finance Minister and Dominic LeBlanc as Trade Minister.
WTI oil prices are just above the bottom of its 62.76-63.68 range. Prices declined overnight after the American Petroleum Institute report a 4.2-million-barrel increase in crude stocks as of last Friday. Traders are still hoping that a Ukraine /Russia ceasefire and a friendly US/China trade relationship will boost crude demand and offset recent Opec production increases.
The US and Canadian economic calendars are empty of top tier data.
USDCAD Technicals
The intraday USDCAD flipped to bearish after yesterday’s failure to decisively breach resistance in the 1.4010-20 area. The subsequent decline blew through support in the 61.8% Fibonacci retracement level at 1.3951 and dropped to 1.3902 overnight. However, the short-term momentum indicators warn the intraday sell off is overdone and a retest of 1.3990 is possible.
The medium term technicals are bearish while prices are below the 100-day moving average 1.4220 and the 200-day moving average at 1.4013.
For today, USDCAD support is at 1.3910 and 1.3890. Resistance is at 1.3960 and 1.3990
Today’s Range: 1.3880-1.3970
Chart: USDCAD daily
FX at a Glance
Sheik Donald
The President of the United States is in the midst of a Middle East tour, offering U.S. military aid and defense pacts in exchange for Arab investment in America—and in the Trump Organization. He’s also opening the door for U.S. tech firms to sell their most advanced AI chips to Saudi Arabia and the United Arab Emirates. Trump is so utterly besotted with Saudi Arabia’s mind-boggling wealth that he’s conveniently forgotten 15 of the 19 terrorists behind 9/11 came from the Kingdom.
Blame Powell
US inflation data came in higher than in March month over month, while core inflation was unchanged year over year and the data did not reflect Trump’s tariffs. That’s not what Trump saw, and he tweeted “No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!! THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell? Not fair to America, which is ready to blossom? Just let it all happen, it will be a beautiful thing!” We may hear more on that subject when Mr. Powell speaks this morning.
It Was Just a Bad Dream
The S&P 500 index has recouped all the losses it incurred in 2025 but whether or not the move is sustainable is still being debated. Asian markets closed mixed. Australia’s ASX 200 gained 0.13% while Japan’s Topix fell 0.32% and Hong Kong’s Hang Seng rallied 2.30%.
European bourses are in negative territory with the French CAC 40 down 0.61% followed by a 0.52% decline in the German Dax. S&P 500 futures are close to unchanged. The US 10-year Treasury yield is steady at 4.46%.
EURUSD
NY Open: 1.1251, Overnight Range: 1.1180-1.1266
EURUSD rallied post-US CPI and managed to fill the Friday NY close–Monday Asia open gap. Further gains may be hard to come by as US Treasury Secretary Scott Bessent expects EU/US tariff negotiations to be “difficult.” Meanwhile, the Fed remains on hold while the ECB is in easing mode. The EURUSD technicals are bearish below 1.1300.
GBPUSD
NY Open: 1.3350, Overnight Range: 1.3291-1.3361
GBPUSD rallied hard thanks to the post-US CPI dollar sell-off and some hawkish comments by BoE policymaker Catherine Mann. She said that she won’t vote for lower rates until she sees some deterioration in the resilient jobs data and goods inflation. The GBPUSD technicals are bullish and looking for a break above 1.3360 to extend gains to 1.3450.
USDJPY
NY Open: 145.87, Overnight Range: 145.62-147.67
USDJPY traded lower on the back of US dollar weakness, but the ongoing Trump tariff war is hampering BoJ efforts to raise interest rates. Today’s Producer Price data is another barrier to rate hikes as April PPI dipped to 0.2% m/m from 0.4% in March and 4% y/y from 4.3%.
AUDUSD
NY Open: 0.6482, Overnight Range: 0.6464-0.6502
AUDUSD soared yesterday and rose again overnight due to the lowering of China/US trade tensions and the soft US inflation data which sparked widespread US dollar selling. AUDUSD got an added lift from higher-than-expected wage price data which showed Q1 wages rising 0.9% q/q and 3.4% y/y. The results reduce the odds that the RBA cuts rates on May 20.
NZDUSD
NY Open: 0.5962, Overnight Range: 0.5932-0.5939
Kiwi rode the greenback selling wave and added to its gains overnight. Electronic Card retail sales had no impact on NZDUSD. The headline data was weaker than expected but the Core retail sales component was slightly better. The results tick another box in RBNZ decision for cutting rates.
USDMXN
NY Open: 19.3623, Overnight Range: 19.3467-19.4365
USDMXN sank on the back of the broad US dollar sell-off following the softer-than-expected US inflation data on Tuesday and extended the losses overnight. Prices were further undermined by earlier economic data suggesting that the Mexican economy was fairly resilient. The widely expected 50 bp rate cut by Banxico on Thursday is priced in.
China Snapshot`
China Snapshot`
PBoC fix: 7.1956 vs exp. 7.1813 (Prev. 7.1991)
Shanghai Shenzhen 300 rose 1.21% to 3943.21
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
