April 26, 2025
USDCAD: open 1.3872, overnight range 1.3850-1.3893, close 1.3856
USDCAD has been trading sideways and in a fairly tight range since Thursday and that should be the case today.
Canadians are on the verge of re-electing another Liberal government. The choice is between a career politician and a newcomer with an exceptional and distinguished résumé. Both claim to be fiscally responsible, yet both have presented budgets that increase deficits. Lucky us.
Trump is still trumpeting his tariff strategy, but markets appear to be tuning him out—for now. “When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year. Also, massive numbers of jobs are already being created, with new plants and factories currently being built or planned. It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!”
WTI dropped from 63.70 to 62.72 as traders dialed back hopes for improved Chinese crude demand. US Treasury Secretary Scott Bessent said he was not talking trade with Chinese officials. However, an article in the UK Financial Times claims that China is stockpiling crude.
The Canadian and US data calendars are empty.
USDCAD Technicals
The USDCAD intraday technicals are bullish while trading above 1.3850, looking for a break above 1.3910 to extend gains to 1.3950. A move below 1.3850 targets 1.3810 then 1.3770.
Longer term, the USDCAD technicals are unchanged from Friday. USDCAD is consolidating in a 1.3770-1.4010 range and trading with a minor bid. A break above 1.4010 opens the door to further gains to 1.4112. Momentum indicators suggest a lack of conviction for downside moves but suggest the latest rally is more of a correction than a trend.
For today, USDCAD support is at 1.3840 and 1.3790. Resistance is at 1.3910 and 1.3950
Today’s Range: 1.3840-1.3920
Chart: USDCAD daily.
FX at a Glance
Economic Data Returns to Center Stage
The cloud of tariff flack has dissipated but occasional barrages are keeping traders on their toes. The office of the US Trade Representative reportedly has a framework for staggered reciprocal trade negotiations. They hope that they will be able to strike 18 trade deals over the next two months. It sounds very sketchy and smacks of desperation, but the news appears to have appeased financial markets for the time being.
Global Equity Markets Climb
Wall Street closed Friday with gains and Trump was relatively quiet on the weekend. That was enough for Asia equity traders to see the positive in the world and they bought stocks, albeit not aggressively. Japan’s Topix climbed, helped by hopes for a tame BoJ, while Australia’s ASX 200 rose 0.36%.
European bourses opened in positive territory and managed to hang on to most of the gains. The German Dax is up 0.62% while the French CAC 40 index has gained 0.68%. The UK FTSE 100 is the laggard, rising just 0.34% as of 6:30 am. S&P 500 futures are modestly lower, down 0.15%, while the US 10-year Treasury yield has risen 0.4% to 4.28%. Gold (XAUSUD) slumped to 3268.34 from 3330.17 before rising back to 3289.00 in NY.
EURUSD
NY Open: 1.1351, Overnight Range: 1.1330-1.1381
EURUSD is rangebound and little changed from Friday. Traders are leaning towards a June rate cut, perhaps spurred on by recent EURUSD strength, which has served to put a cap on recent EURUSD gains for the time being. EURUSD technicals are still bullish while prices are above the 1.1250-70 area.
GBPUSD
NY Open: 1.3344, Overnight Range: 1.3280-1.3354
GBPUSD traded sideways inside Friday’s range with a lack of news and data limiting price action. GBPUSD upside may be limited due to fears that Trump’s tariffs will crush domestic economic growth. The EY Item Club, a highly respected economic forecasting group, downgraded its 2025 GDP outlook to 0.8% from 1.0%, and its 2026 forecast to 0.98% from 1.6% earlier. Trump’s tariffs are to blame.
USDJPY
NY Open: 143.42, Overnight Range: 143.30-143.89
USDJPY peaked in Asia then drifted lower into the NY open. Traders are cautious awaiting details from the US/Japan trade talks and ahead of the BoJ meeting Thursday when monetary policy is expected to be unchanged.
AUDUSD
NY Open: 0.6397, Overnight Range: 0.6368-0.6407
AUDUSD traded inside Friday’s range in an uneventful session. AUDUSD has garnered some support from hopes that China and US trade tensions are easing, after China exempted some US imports from tariffs on Friday. The hopes may be misguided as China said they are not having any trade talks with the Americans. NZDUSD tracked AUDUSD moves in a 0.5929-0.5970 band.
USDMXN
NY Open: 19.5189, Overnight Range: 19.4829-19.5650
USDMXN is consolidating last week’s gain, traded sideways overnight and then hit the bottom following today’s Mexican employment data. Mexican unemployment fell to 2.2% from 2.5% in March. The Mexican trade deficit of $2.1 billion flipped to a surplus of $3.44 billion which also weighed on USDMXN. Later this week, Q1 GDP data may provide more economic clarity following last week’s IMF and OECD GDP estimate downgrades.
China Snapshot`
PBoC fix: 7.2043 vs exp. 7.2898 (Prev. 7.2066).
Shanghai Shenzhen 300 fell 0.14% to 3781.62
Trump said that Xi Jinping called him to discuss tariffs. Chinese authorities say “it ain’t so.” Th Chinese embassy in Washington posted this statement “China and the US are NOT having any consultation or negotiation on #tariffs.
Goldman Sachs says US tariffs put up to 16 million jobs at risk in China. Chinese officials from the National Development and Reform Commission said “We still have ample policy reserves and plenty of policy space. “No matter how the international situation evolves, we will stay focused on our development goals and concentrate on managing our own affairs well. We are fully confident in achieving this year’s economic and social development targets.”
PBoC Deputy Governor said China will cut RRR and interest rates at an appropriate time, as well as guide financial institutions to guarantee financing demand for foreign trade firms.
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
