June 18, 2025

USDCAD: open 1.3665, overnight range 1.3652-1.3692, previous close 1.3679

USDCAD rallied yesterday, rising from a low of 1.3558 to 1.3695 before closing at 1.3679, due to fears that Trump would unleash American military might on Iran. Truth Social tweets like “Unconditional Surrender” and another saying” We know exactly where the so-called “Supreme Leader” is hiding. He is an easy target,” justified the concerns.  It didn’t happen and USDCAD consolidated the gains in a 1.3652-1.3692 range overnight. Yesterday’s BoC Summary of Deliberations from the June 4 meeting did not offer anything new.

USDCAD Technical Outlook: The intraday technicals are bullish following the decisive break of downtrend lines from June 10 and May 16 at 1.3600 and 1.3650 respectively. Failure to extend the gains above 1.3705 suggests a drop to 1.3630 today.

Longer term, USDCAD is targeting a retest of resistance at 1.3750 if prices hold above 1.3630. However, the downtrend from March remains intact and upside momentum indicators are weak.

For today, USDCAD support is at 1.3630 and 1.3590.  Resistance is at 1.3705 and 1.3730. Today’s Range 1.3630-1.3710

Big Picture

FOMC expected to leave rates unchanged while providing updated projections. Policymakers will weigh the impact of possible US involvement in the Israel/Iran war and the risk of Trump tariffs on inflation.

Trump makes veiled threat of “regime change” to Iran’s Ayatollah Khamenei in tweet.

WTI oil prices traded in a 72.17-74.03 range and opened near the low after fears of a US strike on Iranian nuclear sites failed to materialize. Petroleum Institute weekly stocks report showed crude inventories fell 10.133 million barrels last week

G-7 Summit ends on fractured note with group becoming G-6 and Trump.  The US President accepted fawning accolades then skipped most of the meeting and the Leaders were unable to issue a single joint communique.

US markets are closed tomorrow, June 19 for Juneteenth Day, so the usual Thursday weekly jobless claims data was released this morning.  The results were exactly as predicted at 245,000 compared to the upwardly revised 250,000 last week. Building Permits fell 2% in May compared to -0,4% in April, while Housing Starts fell 9.8%.

Stock Taking

Global equity traders were mostly sidelined overnight ahead of today’s Fed meeting. Australia’s ASX 200 index lost 0.12%, while Japan’s Topix gained 0.77%. Hong Kong’s Hang Seng lost 1,12%.

European bourses are in negative territory except for the UK FTSE 100 index which is up 0.13%. The German Dax is down 0.27% and the French CAC 40 has fallen by 0.13%. S&P 500 futures have risen 0.11 % while the US 10-year Treasury yield trickled down to 4.37%. as of 5:43 am PDT. Gold (XAUUSD) traded in a 3370.79-3399.99 range.

EURUSD

EURUSD consolidated yesterday’s losses in a 1.1475-1.1524 range overnight. The single currency ignored better than expected ZEW data on Tuesday and today’s Eurozone harmonized inflation data, which came in as expected, had no bearing on FX. EURUSD traders are assessing the impact of higher oil prices on inflation and fear an increase would derail ECB rate cuts.

GBPUSD

GBPUSD plunged yesterday and remains on the defensive today. Prices opened at 1.3464 after trading in a 1.3422-1.3476 range overnight, with the FOMC and Bank of England meetings putting a damper on price action. UK inflation numbers were as expected.

USDJPY

USDJPY traded in a 144.80-145.44 range overnight. Yesterday’s safe-haven demand for yen following Trump’s Iran threats was offset by surging oil prices as Japan is a heavy importer of crude. USDJPY is supported by trade data, which showed Japanese exports declined for the first time in 8 months, thanks to Trump’s tariffs.

AUDUSD

AUDUSD traded in a 0.6468-0.6514 range overnight with prices weighed down by broad US dollar demand on increased geopolitical concerns. NZDUSD traded in a similar fashion in a 0.6010-0.6040 range.

USDMXN

USDMXN traded higher in the wake of yesterday’s risk-off session and attempted to recoup some losses in a 18.9600-19.0345 range overnight. President Claudia Sheinbaum said she had a good phone call with Trump, after he blew off a face-to-face meeting at the G-7.

USDCNY

PBoC fix: 7.1761 vs exp. 7.2027 (prev. 7.1746)
Shanghai Shenzhen 300 rose 0.12% to 3874.97

PboC Governor Pan Gongsheng said that they would set up an “international operations center” for the digital yuan in an effort to boost the global influence of the currency.

FX HIGH, LOW, OPEN (AS OF 6:00 AM ET)

FX data source: Yahoo Finance / Bloomberg / OANDA.

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