USDCAD open: 1.3939, overnight range 1.3938-1.3958 close 1.3942
USDCAD dropped to 1.3907 in the wake of the US inflation data yesterday, but it quickly recouped the losses.
The Canada US trade talks are heating up. The Globe and Mail reported that Ottawa may accept a 10-15% tariff on cars while dropping all of its retaliatory American car tariffs. It sounds like Carney is surrendering even though the American auto industry would get hammered as well.
The Alliance for Automotive Innovation, which represents nearly all major automakers except Tesla, stated that the 25% tariffs would lead to drastic price hikes. Most anticipate the price of some vehicle models will increase by as much as 25%. Forde CEO Jim Farley warned that the tariffs would blow a hole in the US industry.
WTI oil traded defensively in a 81.49-83.31 range. The IEA cut its 2026 oil demand forecast by 1.6 million barrels/day. OPEC cut its forecast as well but not as aggressively, just by 510,000 b/d.
There are no Canadian economic reports today.
USDCAD Technicals
The intraday USDCAD technicals are bearish below 1.3970, and looking for a break below 1.3920, which is also the 100-day moving average, to extend losses toward 1.3900. A move above 1.3970 targets 1.4030.
Longer term, a break below the 100-day moving average at 1.3920 opens the door to a drop to the 200-day moving average at 1.3855. Below that, the 0.618 Fibonacci retracement of the 2026 range, at 1.3781, becomes the next support, and a break there opens the door to 1.3656, the 0.786 retracement.
For today, USDCAD support is at 1.3920 and 1.3900. Resistance is at 1.3970 and 1.4030.
Today’s expected range is 1.3900-1.3970.
FX Heat Map
FX open high low 6:00 am
If Plans A, B, C, D, and E Fail, Try Sanctions
Trump has switched from bombing Iran with explosives to bombing the country with sanctions in a desperate effort to extract America from his bungled attack. White House officials say the strategy is working, claiming that the US sanctions and a naval blockade have left Iran completely bankrupt.
Sanctions have been America’s “go-to” tactic for decades. They sound good. It makes the administration look like it is accomplishing something, but they only worsen conditions for civilians. The proof is Russia, Cuba, North Korea.
Inflation-Meh!
Today’s PPI data was conclusively inconclusive. Headline PPI rose 4.7% y/y (forecast 4.9%, June 5.5%), and Core-PPI was 4.2% y/y, as expected. Weekly jobless claims rose 7,000 to 209,000. All in all, there is nothing to create a sense of urgency at the Fed.
Taking Stock
Asian equity indexes closed mixed. Japan’s Topix rose 0.89%, while Australia’s ASX 200 fell 0.23% and Hong Kong’s Hang Seng index lost 0.17%.
As of 5:30 am Pt, am, the German DAX is up 0.42%, and the French CAC 40 has gained 0.13%. The UK FTSE 100 is down 0.31%. S&P 500 futures are up 0.16%, the US 10-year Treasury yield is 4.649%, the DXY is 99.93 and gold is 4,388.14.
EURUSD | Range 1.1511-1.1539
EURUSD is trading at its session peak ahead of today’s US PPI and weekly jobless claims numbers. Eurozone Industrial Production rose 0.1% y/y (forecast -0.8%, May -0.1%) but it was not a factor. The single currency is struggling for direction and without a large US data surprise in either direction or another US attack on Iran, it will remain adrift today.
GBPUSD | Range 1.3474-1.3501
GBPUSD peaked in Asia, bottomed out in Europe then recovered the losses into the NY open ahead of the US data. UK Q2 GDP rose 0.4% q/q (previous 0.6%) and 1.2% y/y (previous 0.9%). June growth was faster than expected at 0.3% compared to no growth in May, which analysts suggest was because of the World Cup. The results were not enough to offset disappointment from weaker than expected manufacturing and industrial production numbers.
USDJPY | Range 159.18-159.49
USDJPY had a bit of a choppy session with prices plunging to the session low after Bloomberg reported that the Japanese government is supportive of a near-term rate hike. They are concerned that the weakening yen may be driving up prices. July PPI rose 7.2% y/y (forecast 7.4%, previous 7.3%). Prices drifted higher ahead of today’s US PPI data.
AUDUSD | Range 0.7044-0.7067
AUDUSD is rangebound and looking for fresh direction. The downside is underpinned by the somewhat hawkish tilt to the RBA outlook.
USDMXN | Range 17.0380-17.0806
USDMXN is consolidating its recent gains after dropping to 17.0156 following the US CPI data. Mexican and Canadian free trade negotiators are both pushing the US to lower tariffs on North American cars. Mexico wants tariffs on vehicles that don’t comply with content rulings to drop to 5 or 10% from the current 25%.
CHINA
- PBoC Fix: 6.7888 vs exp. 6.7470 (prev. 6.7882)
- Shanghai Shenzhen CSI 300 fell 0.5% to 4,663.95
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
