June 3, 2025

USDCAD: open 1.3727, overnight range 1.3709-1.3739, close 1.3716

USDCAD is modestly bid on the back of a generally stronger greenback vs the majors and more “trade demands” from Trump. Reuters claims that Trump is demanding all countries to deliver their “best offer” by tomorrow. In addition, the White House is saying threat Trump will likely speak to China President Xi Jinping this week. The reports reek of desperation especially after the OECD downgraded world and US economic growth. The South China Morning Post does not mention anything about Xi and Trump talking and so far, China has ignored Trump’s demands to call.

WTI oil trader softer in a 62.42-63.25 range.  Gains are limited due to sharply rising global oil inventories which have reportedly climbed by 170 million barrels in the past 170 days. (Kayrros-an environmental intelligence company). On the other hand, the risk of increased supply from Iran has diminished due to reports that Iran will reject the latest US nuclear deal.

Today’s US data (JOLTS job openings) and a reportedly $1.1 billion worth of USDCAD 1.3700 option strikes rolling off at 10:00 am should make for an interesting morning.

USDCAD Technicals

The intraday USDCAD technicals are modestly bullish while trading above 1.3690 and looking for a break above the 1.3750 area to extend gains to target the May 16 downtrend line that comes into play at 1.3805. A break will extend gains to 1.3890 while a failures suggests a retest of 1.3660.

The medium term technicals are bearish. The topside is capped by the 200-day moving average at 1.4023.  The momentum and trend indicators confirm bearish pressure as long as prices are below 1.3850.

For today, USDCAD support is at 1.3690 and 1.3660. Resistance is at 1.3750 and 1.3805
Today’s Range: 1.3690-1.37900

Chart: USDCAD monthly

FX at a Glance

Trump Puts the Brakes to Global and US Economic Growth

The Organisation for Economic Development and Cooperation (OECD) slashed its forecast for world economic growth to 2.9% from 3.3%, and it is all because of Trump. The report warned that his TACO tariff strategy and trade barriers are adding to inflation pressures.
The Making America Great Again strategy is more like Making America Depressed Again as OECD predicts just 1.6% US economic growth compared to the 2.8% it predicted in March.
The President is becoming more unhinged with every setback and tweeted up a storm on his (NOT)TruthSocial account. He claimed, “Because of Tariffs, our Economy is BOOMING!” He defended his tariff strategy, which a court ruled was illegal, saying, “If other Countries are allowed to use Tariffs against us, and we’re not allowed to counter them, quickly and nimbly, with Tariffs against them, our Country doesn’t have, even a small chance, of Economic survival.”

European Equity Indexes Slide
Asian equity indexes closed on a mixed note. Japan’s Topix fell 0.22% while Australia’s ASX 200 gained 0.63%. Chinese equity indexes closed in positive territory on a Bloomberg report that the US will extend its tariff pause on Chinese imports until August 31.
European indexes are mixed. The German Dax is flat while the UK FTSE 100 is up 0.15%. S&P 500 Futures are nearly unchanged after being down 0.55% just before NY opened. Gold (XAUUSD) is trading at 3362.83 and the US 10-year Treasury yield is 4.425% as of 5:40 am PT.

EURUSD
NY Open: 1.1413, Overnight Range: 1.1402-1.1455
EURUSD is consolidating yesterday’s gains but is trading well below its peak and continued to slide in NY and is sitting just above the NY low of 1.1378. Eurozone flash headline CPI rose 1.9% in May (forecast 2.0%, April 2.2%), while Core CPI was lower than expected at 2.3% (forecast 2.5%, April 2.7%). The results all but guarantee a 25 bp rate cut at Thursday’s ECB meeting.

GBPUSD
NY Open: 1.3516, Overnight Range: 1.3505-1.3560
GBPUSD traded sideways inside yesterday’s trading range as the greenback tried to regain its footing then dropped to 1.3492 in NY. Traders are waiting for fresh direction from today’s US JOLTS job openings data and tomorrow’s UK Services PMI numbers.

USDJPY
NY Open: 142.86, Overnight Range: 142.38-143.27
USDJPY opened little changed in NY then rallied  to 143.34 in early NY trading. Traders are digesting comments from Bank of Japan Governor Kazuo Ueda. He hinted at extending the slowing pace of bond purchases into 2026. He also noted that the economy was recovering and that business ainvestment was solid.

AUDUSD
NY Open: 0.6460, Overnight Range: 0.6460-0.6501
AUDUSD peaked in Asia then slid rapidly following the disappointing Chinese Caixin PMI numbers and because the RBA minutes discussed cutting rates by 50 bps.

NZDUSD
NY Open: 0.6006, Overnight Range: 0.5991-0.6055
NZDUSD rallied in Asia then retreated in Europe due to the weaker-than-expected Chinese data and due to modest demand for US dollars against the majors.

USDMXN
NY Open: 19.2242, Overnight Range: 19.2031-19.2433
USDMXN rode a roller coaster, and it is sitting at the move’s nadir. The move occurred despite Trump’s plans to boost tariffs on Mexican steel and aluminum imports to 50% starting Thursday. Part of the move was the result of the short-term technicals turning bearish.

China

PBoC fix:  7.1869 vs exp. 7.1872 (Prev. 7.1848)

Shanghai Shenzhen 300 rose 0.31% to 3852.01

Caixin May Manufacturing PMI 48.3 (forecast 50.6, April 50.4)- The drop in the PMI is the lowest I n nearly 3 years and evidence that Trump tariffs are starting to bite.

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

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

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