June 30, 2025

USDCAD open 1.3680, overnight range 1.3654-1.3700, close 1.3683

USDCAD soared Friday, rising from 1.3665 to 1.3759, when President Trump announced he was terminating “ALL discussions on Trade with Canada, effective immediately.” Trump was irked that Canada had the audacity to join with 18 other countries to levy a digital tax, impacting US companies like Google, Meta, Amazon, Apple, and Uber.

Canada blinked. Late Sunday, the Canadian government announced it would rescind the planned digital tax and tariff-framework talks will begin again. There will never be a deal in the conventional definition of the term, because the USA, under Trump, cannot be trusted to honour any agreements.

Friday, Canada reported weaker-than-expected economic growth in April and predicted that the weakness would continue in May. GDP fell -0.1% m/m in April (forecast 0, previous upwardly revised 0.2%). Those results took a back seat to softer-than-expected US PCE Price Index data, which increased (slightly) odds for Fed rate cuts. That news weighed on the US dollar and by default USDCAD.

USDCAD downside remains vulnerable to month-, quarter-, and half-year-end portfolio rebalancing flows.

It is a busy but holiday-shortened week. Canadian markets are closed tomorrow and US markets are closed Thursday.

Traders will be cautious ahead of the 10:00 am option expiry window when $800 million of 1.3650 USDCAD strikes and $1.6 billion of 1.3690–1.3705 strikes roll off.

The US June Chicago PMI report is expected to have risen to 43 from 40.5.

USDCAD Technical Outlook:

The intraday technicals are neutral inside a 1.3630-1.3730 band. A topside break targets, the 1.3800-1.3830 area while a move below 1.3620 opens the door to a test of support at 1.3550.

Longer term, USDCAD is bearish while prices are below 1.3860, looking for a break below 1.3550 to test 1.3400.   A move above 1.3750 puts 1.3800 in play. The momentum indicators are mixed but still favour a weaker USDCAD.

For today, USDCAD support is 1.3630 and 1.3610.  Resistance is 1.3730 and 1.3780. Today’s Range 1.3640-1.3730

Markets in Brief

Trump scored a resounding win against Canada in tariff-framework talks and the race is on to see how long it takes for the European Union to fold. EU politicians are talking tough but only carrying a twig. They will cave to Trump demands and Japan is already bowing to the Americans.

Trump prevailed in his demand for NATO members to spend 5% of GDP and his win was acknowledged in the most servile, groveling manner by NATO Secretary General Mark Rutte.

US markets are focused on Washington and Trump’s “One Big Beautiful Bill,” which Trump wants passed by July 4.

Oil

WTI oil traded in a 64.53–65.81 range with support from concerns of further OPEC production being offset, to a degree, by reduced fears of supply disruptions from the Middle East. Polish refiner Orlen announced it would not renew a Russian supply contract, which expired June 30.

Stock Taking

The S&P 500 made a new record high and S&P 500 futures trades are adding to that peak today. The prospect of US rate cuts and an easing in trade tensions lifted Asian equities. Australia’s ASX 200 rose 0.33% and Japan’s Topix rose 0.43%. Hong Kong’s Hang Seng Index was the outlier, losing 0.87%. The US 10-year Treasury yield consolidated Friday’s losses in a 4.24–4.29% range.

European bourses are mixed to flat, but off their worst levels.  The German DAX has lost 0.20%, the UK FTSE 100 is down 0.16%, and the French CAC is flat. S&P 500 futures are up 0.36% as of 5:40 am.

EURUSD

EURUSD hung on to Friday’s gains in a 1.1712–1.1751 range. Traders ignored weaker-than-expected German retail sales (actual 1.6% m/m, forecast 0.5%) and but drifted lower after German June inflation data, was weaker than expected. (CPI actual 2.2% y/y vs forecast 2.2%)

GBPUSD

GBPUSD traded in a 1.3691–1.3741 range with prices underpinned by broad US dollar weakness because of expectations that the Fed will cut rates deeper than expected. The greenback continues to trade with a negative bias due to Trump’s comments about replacing Powell, and that is supporting GBPUSD. The UK/US trade deal came into effect today.

USDJPY

USDJPY traded lower in Asia, falling from 144.65 to 143.78, then attempted to rally into the NY open, reaching 144.20. The USDJPY drivers are unchanged—the prospect of BoJ rate hikes and Fed rate cuts are limiting USDJPY topside, while sliding US Treasury yields encourage US dollar selling.

AUDUSD

AUDUSD traded choppily in a 0.6523–0.6553 range supported by the generally weak US dollar and improved risk sentiment after China and US trade tensions appear to have eased. Prices were also supported after the TD-MI inflation gauge for June rose 0.1% m/m after dropping 0.4% in May.

USDMXN

USDMXN traded in a 18.8002–18.8665 range and is trading with a bearish bias. Broad-based US dollar weakness, improving risk sentiment from a possible Mexico-US trade deal, and falling US interest rates are keeping USDMXN on the defensive.USDCNY

PBoC fix: 7.1586 vs exp. 7.1681 (Prev. 7.1627).

Shanghai Shenzhen 300 rose 0.37% to 3936.08

NBS June Manufacturing PMI 49.7 Previous 49.5). Non-Manufacturing PMI 50.5, previous 50.3.

FX High, Low, Open

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance