May 30, 2025

USDCAD: open 1.3819, overnight range 1.3801-1.3830, close 1.3808

USDCAD gave up yesterdays gains and traded sideways overnight, and prices dropped below the overnight low to 1.3787, after Canada posted a more robust than expected Q1 GDP number which rose 2.2% y/y vs the forecast of 1.7% and 2.1% previously. March GDP rose 0.1% m/m, as expected.

The GDP data should be taken with a grain of salt as exports were the main driver of growth and is due to exporters front-running tariffs. Passenger cars and machinery exports rose sharply. However, underlying domestic momentum is losing steam. With tariffs set to bite and households turning cautious, Q2 growth could underwhelm unless stimulus or rate cuts spark renewed demand.

WTI oil traded lower in a 60.52-61.65 ahead of the Opec meeting amid fresh reports that the cartel will boost production despite the growing risk of an oil glut as tariffs take a bite out of global growth expectations.  

USDCAD Technicals

The intraday USDCAD technicals neutral with USDCAD trapped in a 1.3770-1.3870 trading range. A break above 1.3880 targets the 1.4000 area while a move below 1.3770 puts 1.3680 in play.

The medium term technicals are bearish. The April downtrend channel is intact while prices are below 1.3910 and a decisive break of 1.3640-50 area suggests further losses to 1.3450. A topside break targets 1.4020,

For today, USDCAD support is at 1.3770 and 1.3740. Resistance is at 1.386 0 and 1.3920
Today’s Range: 1.3770-1.3860

Chart: USDCAD daily

FX at a Glance for May

CIT Court Ruling on Trump Tariffs Delayed on Appeal.

A US federal appeals court delayed the implementation of the Court of International Trade (CIT) ruling that invalidated Trump’s tariffs. The cat is among the pigeons and global markets are trading cautiously. Trump was rather perturbed with the CIT ruling and in a 504-word tweet he claimed the ruling was made because of a hatred of “TRUMP.” “Where do these initial three Judges come from? How is it possible for them to have potentially done such damage to the United States of America? Is it purely a hatred of “TRUMP?” What other reason could it be?”
It seems that the key reason why Trump is so upset is because Congress, (the people Americans elected to govern the country), would have to approve tariff actions, which Trump says, “would completely destroy Presidential Power.” Democracy is a bitch.

Trump Scolds Powell
Fed Chair Jay Powell was summoned to the White House to pay homage to Trump. To no one’s surprise, Trump berated Powell for not lowering interest rates. The Federal Reserve statement said “Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.”

US Inflation Numbers Fail to Excite
The Fed-favourite inflation measure, Core-PCE Price Index, dipped to  2.5% y/y from 2.7% the level is still too far above the inflation target to encourage the Fed to cut rates.  

Equities Ending the Month with Gains
Australia’s ASX 200 closed with a modest 0.30% increase to finish the month with a 3.8% gain. Japan’s Topix fell 0.37% but closed the month 5.03% higher. Hong Kong’s Hang Seng is the best-performing index in May, rising 5.329%, despite a loss of 1.20% today.
European bourses are in positive territory and poised to finish April with decent gains led by a 7.32% rise m/m in the German DAX. S&P 500 Futures are down 0.23% but, barring a total market meltdown, will finish May with gains over 6.0%. The US 10-year Treasury yield is 4.24% and gold XAUUSD sits at 3296.41.

EURUSD
NY Open: 1.1326, Overnight Range: 1.1323-1.1390
EURUSD is off its best levels seen yesterday after the Fed appeals court left Trump’s tariffs in place. The ECB is expected to cut its benchmark rate by 25 bps next week, which is fully priced in, and the slew of Euro area economic reports did not have any impact on trading. The single currency needs to break above 1.1400 or risk a retest of the 1.1200 area.

GBPUSD
NY Open: 1.3471, Overnight Range: 1.3455-1.3511
GBPUSD opened close to where it opened yesterday after the CIT decision was delayed. A Lloyds Bank poll found that Business Confidence rose by 11 points, offsetting the 10-point decline in April. The news was ignored and the technicals suggest that a move below 1.3420 (hourly chart) would negate the May uptrend and target 1.3350.

USDJPY
NY Open: 143.99, Overnight Range: 143.44-144.24
USDJPY traded defensively after higher-than-expected Tokyo inflation data (actual 3.6% y/y vs forecast 3.5% and April 3.4%) supported the need for rate hikes. However, the support eroded somewhat after industrial production fell 0.9% compared to a gain of 0.2% in March.

AUDUSD
NY Open: 0.6419, Overnight Range: 0.6408-0.6453
AUDUSD is little changed from yesterday but it is trading defensively after April retail sales fell 0.1% rather than rise 0.3% as expected.

NZDUSD
NY Open: 0.5956, Overnight Range: 0.5948-0.5990
NZDUSD is marginally higher than yesterday but off its best level ahead of today’s US data. Gains were capped by a soft Consumer Confidence report, which dipped to 92.9 from 98.3 in April.

USDMXN
NY Open: 19.2982, Overnight Range: 19.2948-19.3355
USDMXN is consolidating yesterday’s losses with a slightly bearish bias. The minutes from the Banxico meeting of May 14 reaffirmed the dovish bias due to economic slack.

China Snapshot`

PBoC fix:  7.1848 vs exp. 7.1859 (Prev. 7.1907)

Shanghai Shenzhen 300 fell 0.48% to 3840.23

US Treasury Secretary Scott Bessent said that trade talks with China have stalled and required Trump and Xi Jinping to meet.

FX high, low, open (as of 6:00 am ET)

Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.

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