August 6, 2025
USDCAD open: 1.4008, overnight range 1.3994-1.4018. close 1.4013
USDCAD is consolidating yesterday’s losses ahead of USnonfarm payrolls data on Friday. Traders remain wary and are keeping an eye on Middle East developments. Trump continues to talk about an Iran deal being close while threatening to blow them off the map in the same breath.
Canadians should be thankful. Trump told a Vegas audience that he likes us, but our leadership is nasty. Coincidently, that what Canadian’s think of America.
Oil prices are steady WTI traded sideways in a 74.61-76.02 range and are near the top in NY trading. Traders are awaiting further developments in the Trump war against Iran. The conflict has been a windfall for eight major oil producers. The UK Guardian reported those eight doubled their profit to $93.0 billion, in the first quarter after the war started, compared to the year before.
US weekly jobless claims rose a mere 2,000 to 198,000 which reflects a steady labour market. FX markets failed to budge on the news
USDCAD Technicals
The intraday USDCAD technicals are bearish below 1.4050 and looking to break below the 1.3990-1.4000 support zone for a test of 1.3960. A move above 1.4020 suggests further 1.4000-1.4060 consolidation but only a decisive break above 1.4080 negates the downward pressure.
The USDCAD downtrend from July’s 1.4260 peak continues to cap the topside, with the descending trendline now at 1.4090. A decisive break above 1.4090 would put 1.4180 in play. The 100-day moving average, at 1.3900, remains the magnet on a sustained break below 1.3960, with the 200-day SMA at 1.3860 the next downside target.
For today, USDCAD support is at 1.4000 and 1.3960. Resistance is at 1.4020 and 1.4060.
Today’s expected range is 1.3970-1.4050.
FX Heat Map
FX open high low 6:00 am
Talk, Talk, Talk
Everyone’s talking and markets have stopped to listen. Trump continues to natter about wanting to make a deal with Iran while in the same breath saying the US was ready for its biggest attack since WWII, but he respects them. Gee, that must really warm the hearts of the IRGC.
VP Vance said that the US and Iran negotiations will take some time, but will land in a “good place.”
Iran and Oman have reached an understanding around the Strait of Hormuz, but Iran’s Deputy Foreign Minister said an “understanding” does not mean opening the Strait.
Fed Governor Lisa Cook said that although she voted to leave rates unchanged, she is ready to hike if inflation rises, which may also be a tacit flip-of-the-bird to Trump, who tried to fire her.
Global markets stayed close to home. The US dollar started the New York session either side of flat against the major G-10 currencies, and Treasury yields are little changed. Gold is the outlier and it has risen from $4,245.80 to $4,304.15 before giving back most of those gains in NY. The gold move is because some traders believe that the Warsh Fed may not be too focused on inflation.
Taking Stock
Asian markets closed mixed. Japan’s Topix rose 0.24%, Australia’s ASX 200 gained 0.47%, and Hong Kong’s Hang Seng lost 1.49%.
As of 5:40 am PT, the French CAC-40 is up 0.68%, the German Dax has gained 0.18% and the UK FTSE 100 is up 0.12%. S&P 500 futures are up 0.13%, the 10-year Treasury yield is 4.644%, the DXY is 99.74 and gold is $4,266.58.
EURUSD | Range 1.1536-1.1560
EURUSD saw a peak in Asia then drifted lower into the NY open. Traders are awaiting today’s US weekly jobless claims numbers and tomorrows US nonfarm payrolls data. Domestic data was not much of a factor. German factory orders rose 3.1% in June, easily beating the 0.3% seen in May, although the results were skewed by some large orders. Without them, factory orders fell 0.5%. Eurozone retail sales fell 0.3% in June.
GBPUSD | Range 1.3452-1.3472
Sterling is trading softer but in its well-defined range with traders content to await US employment data and developments from Iran and US ceasefire talks. GBPUSD is also underpinned by the lingering softness of the greenback following yesterday’s mixed US economic data.
USDJPY | Range 157.56-157.94
USDJPY drifted higher as it recoups some of its intervention losses. Economists noted that the Japan and US intervention lacked the “oomph” compared to historical interventions as it was a bilateral action and not a G-7 operation. Many believe the US only intervened to stop Japan from selling US Treasuries to fund the operation, which would likely have boosted US interest rates.
AUDUSD | Range 0.7036-0.7061
AUDUSD trickled lower in Europe as support from news that Australia recorded a surprise trade surplus of A$1.93 billion (forecast A$1.08b) faded. Traders are biding their time until Friday’s NFP data.
USDMXN | Range 17.2293-17.2689
USDMXN tracked broad US dollar movements ahead of today’s Banxico monetary policy meeting. The bank is almost universally expected to leave its benchmark rate unchanged at 6.50%.
CHINA
- PBoC Fix: 6.7895 vs exp. 6.7462 (prev. 6.7889)
- Shanghai Shenzhen CSI 300 fell 0.15% to 4,651.31
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
