July 17, 2025
USDCAD open: 1.4030, overnight range 1.4021-1.4048, close 1.4042
USDCAD has lost about 1.0% this week and it is consolidating the move in early NY trading. US dollar from renewed risk aversion is offset by narrowing CAD/US interest rate spreads. Yesterday’s US data was better than expected which suggested the Fed could leave rates unchanged for longer than previously thought.
The news supported the narrowing of the 10-year CAD/US interest rate differential from -107.4 on Monday to -100.2 this morning. The 2-year moved from -138.8 to -130.9 today.
US data Building permits fell 0.3% m/m, which was an improvement over -0.9% in May. Housing starts surged 19% compared to -15.2% in May. Import price index rose 0.3% while export prices fell -0.6%.
Capacity utilization and Michigan Consumer sentiment are on tap.
USDCAD Technical Outlook
The intraday USDCAD technicals are little changed from yesterday. They are bearish while trading below the 1.4070-80 area and looking for a decisive break below 1.4020 targets for a test of 1.3960.
Longer term, USDCAD is bearish below 1.4140 and looking for a test of 1.3990 which represents the uptrend line from the beginning of May. However, the momentum indicators show USDCAD at extreme oversold levels.
For today: USDCAD support is at 1.4020 and 1.3990. Resistance is at 1.4070 and 1.4110.
Today’s expected range is 1.3990-1.4060
FX Heat Map
FX open high low 6:00 am
Iran and Chips
The US and Iran are still at it. The Americans attacked Iranian infrastructure for the sixth day in a row in response to Iran’s non-existent military and its non-existent navy keeping the Strait of Hormuz closed. Oil traders still believe the issues will get sorted and oil traded in a relatively narrow range, albeit prices were bid heading into the weekend.
Traders are paying closer attention to the stock market where plunging semiconductor stocks threaten to trigger panic selling across all sectors as investors scramble to protect profits. US stock futures are poised to open sharply lower.
Taking Stock
Asian equity indexes were hammered overnight. Japan’s Topix plunged 2.72%, Hong Kong’s Hang Seng dropped 1.78% and the Australian ASX 200 lost 0.50%.
As of 5:30 am PT, European bourses are negative. The French CAC 40 has lost 0.79%, the German DAX is down 0.59%, and the UK FTSE 100 is flat. S&P 500 futures are down 0.90%, the 10-year Treasury yield is 4.528%, the DXY is 100.79 and gold is 3980.66.
EURUSD | Range 1.1425-1.1452
EURUSD traded narrowly and uneventfully overnight. Eurozone inflation numbers came in as expected (HICP actual -0.1% m/m and 2.8% y/y) and had no impact. Traders are looking ahead to next week’s ECB monetary policy meeting. No change is expected but that could change if oil prices spike from current levels.
GBPUSD | Range 1.3426-1.3482
GBPUSD is drifting lower in quiet trading. Andy Burnham will become the leader of the UK Labour Party today and then Prime Minister next week. That’s enough to limit GBPUSD gains as will souring risk sentiment from the US and Iran actions and the equity market sell-off.
USDJPY | Range 162.14-162.47
USDJPY is trading with a bid due to rising oil prices and concerns that escalating hostilities between the US and Iran this weekend could drive them even higher. Elevated oil prices are expected to force the BoJ to leave interest rates unchanged at its July 31 meeting.
AUDUSD | Range 0.6966-0.7003
The Australian dollar retreated and is near its overnight session low in NY. The currency is supported by this week’s US data that suggests the Fed has no need to raise rates, in contrast to the RBA which has adopted a hawkish bias. Increasing risk aversion ahead of the weekend is also weighing on prices.
USDMXN | Range 17.4166-17.5048
USDMXN is trading firmer due to renewed risk aversion stemming from the ongoing US and Iran war. Gains are being hampered by downgraded risks for a US rate hike while Banxico has signaled it has paused easing policy.
CHINA
- PBoC Fix: 6.7934 vs exp. 6.7734 (prev. 6.7909)
- Shanghai Shenzhen CSI 300 fell 3.60% to 4,529.10
Chinese authorities largely ignored Trump’s rant about them meddling in the 2020 election.
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
