Agility Daily FX Commentary

June 10, 2025

USDCAD: open 1.3700, overnight range 1.3694-1.3729, close 1.3701

USDCAD continued to edge higher despite modestly improved global risk sentiment from the US/China trade talks going to Day 2.

Prime Minister Mark Carney announced plans to boost defence spending by $9.3 billion this year which raises total defence spending to $62.7 billion or 2.0% of GDP. Traders ignored that news and focused on the narrowing Canada/US 10-year yield spread which has narrowed to -109.2 from -118.3 a week ago.

WTI oil prices trade in a tight 65.16-65.68 range as traders hope that a China/US trade deal will jumpstart Chinese oil demand.

There are no top-tier Canadian or US economic reports today.

USDCAD Technicals

The intraday USDCAD technicals (hourly chart) are bullish above 1.3680 and looking for a break above 1.3750 to extend gains to 1.3800. However, the failure to sustain the break above 1.3700 suggests the move is merely a correction. A break below the intraday uptrend line at 1.3680 and drive prices to support at 1.3640.

The medium term technicals remain bearish with prices below the key moving averages but the momentum indicators show signs of bottoming.

For today, USDCAD support is at 1.3670 and 1.3620. Resistance is at 1.3740 and 1.3780
Today’s Range: 1.3670-1.3750

Chart: USDCAD 4 hour

FX at a Glance

The Art of Deflection

Trump appears to be so embarrassed by the public implosion of his bromance with Elon Musk that he needed to deflect attention elsewhere. The L.A. protests against his aggressive deportation efforts gave him the opening. Hence the “Send in the Marines” order. The legal justification is sketchy.

Russian President Vladimir Putin faced a similar situation. He was embarrassed after Ukraine took out a large chunk of his nuclear bomber fleet then damaged a major bridge to Ukraine, so he unleashed the largest drone attack of the war on hospitals and residential areas in Kyiv.

FX markets did not react to either event and were sidelined awaiting news from Day 2 of the China/US tariff talks in the UK.

Rare-earth vs US tariffs

Chinese exporters are suffering from 30% tariffs on all goods entering the US even though those tariffs were deemed illegal by the Court of International Trade. The Trump administration is appealing, but the Chinese trade negotiators may prefer to wait for the outcome of that appeal before getting down to brass tacks. The issue is who will blink first. The US needs China’s rare-earth minerals to keep defence, automotive, and technology sectors working.

Equity Markets Drifting.

A lack of actionable US data and uncertainty around the US/China trade talks had global equity indexes in neutral. Hong Kong’s Hang Seng closed close to unchanged while Australia’s ASX 200 rose 0.84%. Japan’s Topix finished the session flat. European bourses are mixed. The UK FTSE 100 index is up 0.56% while the German Dax is down 0.29%. S&P 500 futures have gained 0.17%. Gold (XAUUSD) is 3336.97 and the US 10-year Treasury yield is 4.447%, as of 8:15 am ET.

EURUSD

NY Open: 1.1417 Overnight Range: 1.1373-1.1436

EURUSD chopped about in an uneventful session despite a somewhat upbeat Eurozone Sentix survey (actual 0.2 vs -8.1 in May) and comments from ECB policymaker and Austrian Central Bank Governor Robert Holzmann. Mr Holzmann warned that a pause in rate cuts could last a while unless economic developments worsen. EURUSD remains in a 1.1350-1.1450 short-term range.

GBPUSD

NY Open: 1.3493, Overnight Range: 1.3457-1.3585

GBPUSD had a bit of a wild overnight session. Prices fell from the peak in Asia after BRC like-for-like retail sales missed the forecast for a 2.7% gain and only rose 0.6%. A weaker-than-expected UK employment report sent GBPUSD tumbling further. The UK unemployment rate rose to 4.6% (3 months Feb-Apr) compared to 4.4% previously while employment fell by 109,000. ING Bank economists suggest that the employment drop almost guarantees that the Bank of England will cut rates in August.

USDJPY

NY Open: 144.71, Overnight Range: 144.40-145.29

USDJPY rallied due to improved risk sentiment from the US/China trade talks, but the move faded in Europe. Bank of Japan Governor warned that policymakers had little room to support growth with rate cuts if the economy comes under pressure but believes underlying inflation will remain around 2.0%.

AUDUSD

NY Open: 0.6518 Overnight Range: 0.6490-0.6530

AUDUSD struggled for direction and mixed NAB business conditions and business confidence data did not help. Business confidence improved but business conditions were weak. NAB Chief Economist Sally Auld wrote: “Overall, business conditions remain weak. If this continues in coming months, it will be difficult for confidence to rise from current levels.”NZDUSD

NY Open: 0.6048, Overnight Range: 0.6028-0.6059
NZDUSD remained rangebound, but with a bid with prices supported by hopes for a China/US tariff accord.

USDMXN

NY Open: 19.0394, Overnight Range: 19.0346-19.0992
USDMXN continues to grind lower due to improved risk sentiment despite softer inflation that supports further Banxico rate cuts. President Claudia Sheinbaum accepted Canada Prime Minister Mark Carney’s invitation to the G-7 summit next week and she hopes to meet with Trump.

China

PBoC fix:  7.1840 vs exp. 7.1853 (Prev. 7.1855)

Shanghai Shenzhen 300 fell 0.51% to 3865.47

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

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

–