April 21, 2025
USDCAD: open 1.3797, range Fri.-Mon. 1.3781-1.3873, close 1.3848
USDCAD is tracking G-7 price action and continuing to see pressure after the Bank of Canada opted to leave interest rates unchanged at 2.75% last week. Nevertheless, USDCAD direction is a US tariff story.
Trump’s threats to fire Fed Chair Powell are not helping. Mr Powell is concerned about how Trump’s tariffs may lead to a spike in inflation, which is why he is content to leave monetary policy as is. Trump, believes Turkey’s President, Recep Erdogan, was on to something after Erdogan fired central bank officials and ordered the replacements to cut interest rates to combat rising inflation. It didn’t work—Turkey’s inflation soared to 85.5% in October 2022.
WTI oil prices dropped to 62.09 from 63.42 due to a mix of US dollar weakness an reports that the US/Iran nuclear talks are making progress. A deal would lead to an increase in crude supplies at the same time as tariffs depress demand.
USDCAD Technicals
The USDCAD technicals are bearish following the move below the 100- and 200-day moving averages and the break below the 61.8% Fibonacci retracement level of the September-February range. The target is the 78.6% level at 1.3722.
A break below 1.3722 risks a drop to 1.3430 while only a decisive break above 1.3950 negates the downward pressure.
For today, USDCAD support is at 1.3770 and 1.3740. Resistance is at 1.3840 and 1.3880
Today’s Range: 1.3790-1.3880
Chart: USDCAD daily
FX at a Glance
When Traders are Away, the Dollar Bears Run Amok
Most of the major global financial markets are closed for Easter Monday. That includes, but is not limited to: Australia, New Zealand, most of the EU, and the UK. However, there were still some keeners at their keyboards, and they were not impressed with Trump’s comments about terminating Fed Chair Jerome Powell. On Thursday afternoon, Trump claimed he had the power to fire the Fed Chair, saying “If I want him out, he’ll be out of there real fast, believe me.”
Global traders were not impressed and sold US dollars across the board. The US Dollar Index (DXY dropped from Friday’s peak of 99.78 to 97.92. However, the size of the US dollar losses in very thin trading conditions, suggests the greenback has scope to rally today or tomorrow.
It’s a Snooze-fest
There are no economic reports from Canada or the US today. In Canada, today is a federal holiday, but not a statutory holiday, meaning it is hit and miss for what is open and closed. Schools are closed in BC and Ontario and government offices are closed in Quebec.
It gets better later in the week when quarterly earnings reports from Meta, Alphabet, Tesla etc. are released. Today. S&P 500 futures are down 1.04%. Gold climbed with XAUUSD reaching 3,397.87.
EURUSD
NY Open: 1.1545, Overnight Range: 1.1393-1.1574
EURUSD climbed steadily in Asia and Europe and is consolidating the gains in early NY. The ongoing US/China trade war, rising US recession risks and Trump’s threat to fire Powell fueled the gains.
GBPUSD
NY Open: 1.3401, Overnight Range: 1.3278-1.3422
GBPUSD mirrored EURUSD moves and for the same reasons.
USDJPY
NY Open: 140.81 Overnight Range: 140.48-142.14
USDJPY plunged on safe-have demand for yen. In addition, tariff woes fueled a 1.18% decline in Japan’s Topix index.
AUDUSD
NY Open: 0.6404, Overnight Range: 0.6370-0.6438
AUDUSD rallied on the back of broad-based US dollar weakness. Steady Chinese equity markets and unchanged Chinese lending rates supported AUDUSD.
NZDUSD
NY Open: 0.5928, Overnight Range: 0.5928-0.6020
NZDUSD gained with the negative US dollar sentiment.
USDMXN
NY Open: 19.6570 Overnight Range: 19.6561-19.7238
USDMXN continued to retreat on lingering hopes of a thaw in the US/Mexico tariff war following Trump’s tweet of a “productive chat” with Mexican President Sheinbaum. In addition, the overnight US dollar weakness exacerbated selling. Fitch rating affirmed Mexico’s long term debt rating at “BBB” stable outlook.
China Snapshot`
PBoC fix: 7.2055. (Prev. 7.2069).
Shanghai Shenzhen 300 rose 0.33% to 3784.88
The PBOC leaves 1-year Loan Prime Rate (LPR) unchanged at 3.1%, and the 5-year LPR, unchanged at 3.6%.
China pushes back on countries that try to curry favour with the US administration, at China’s expense. The Americans are asking many nations to reduce trade with China if they want to get a deal with the US, including measures such as levying secondary tariffs on imports from countries with close China trade ties (Vietnam for example).
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
