August 11, 2025

USDCAD open 1.3775, overnight range 1.3745-1.3795, close 1.3759

USDCAD is higher than it was at today’s NY open but remains well inside its August range. There isn’t anything “good” to say about the employment data—it is weak across the board, but unless inflation falls sharply, the BoC will leave rates unchanged at their next meeting.

USDCAD remains vulnerable to Trump’s whims, and even if Carney and Trump announced a trade deal, it would be meaningless due to risks of new tariffs being imposed if Trump gets mad about a missed putt. When (not if) that happens, smoke from Canadian forest fires would be enough for a “national security” 50% tariff on all Canadian imports.

WTI oil is trading firmer in a 63.02-64.31 range as hopes of Trump and Putin negotiating a ceasefire fade because Ukraine’s Zelensky may get an invite.  However, OPEC’s latest production increase for September is weighing on prices.

USDCAD Technical Outlook:

The intraday technicals are mildly bullish while trading above 1.3740 and looking to break above resistance in the 1.3830 area to extend gains to 1.3900. A move below 1.3740 targets 1.3660.

Longer term, USDCAD technicals are bearish but downward momentum is stalling. A break above 1.3830 targets 1.3915 while a topside failure risks a return to 1.3600.

For today, USDCAD support is 1.3760 and 1.3730. Resistance is 1.3830 and 1.3870. Today’s Range: 1.3760-1.3840

Petty Megalomaniac

President Trump is still miffed at Obama. The 44th President had everything Trump wished he had—respect of world leaders, and class. Trump elevated his pettiness to another level when he ordered staff to move Obama’s official portrait from a place of prominence in the entrance to the White House to a back staircase.

Shakedown
Trump banned sales of AMD and Nvidia AI chips to China for national security reasons, but these reasons disappeared after Trump extorted a 15% “pizzo” or kick-back. Don Corleone would be very proud.

Peace in our time?
Trump has agreed to meet with Putin in Alaska on Friday to discuss carving up Ukraine in return for Russia’s pledge to end hostilities. That’s like a former gangbanger meeting with the leader of a home invasion gang to discuss the disposition of your house and assets but not including you in the talks. Zelensky may have wrangled an invite.

Trump may soon take aim at Goldman Sachs economists. They warned that soon US companies will stop taking the tariff hit and pass the costs on to consumers, forecasting Core-CPI at 3.2% by the end of the year.

Taking Stock
Asian equity indexes closed higher with Australia’s ASX 200 gaining 0.43% and Hong Kong’s Hang Seng rising 0.10%. Japanese markets were closed for Mountain Day. European bourses are mixed. The UK FTSE 100 index is up 0.29% while the German Dax has fallen 0.20% and the French CAC-40 is down 0.31%. S&P 500 futures are flat. The U.S. dollar index (DXY) climbed from 98.18 in Asia to 98.51 in NY, while gold dropped to 3354.86 from 3400.03 Friday as of 5:45 a.m. PDT.

EURUSD
EURUSD traded in a 1.1639-1.1676 range with traders sidelined ahead of Tuesday’s US inflation report. Prices were underpinned by Fed Governor Michele Bowman reiterating her view for three rate cuts by the end of the year and by hopes for a Ukraine and Russia ceasefire.

GBPUSD
GBPUSD is at the bottom of its 1.3418-1.3476 range. Sterling support from last week’s somewhat hawkish rate cut is fading. UK employment data is on tap tomorrow.

USDJPY
USDJPY drifted in a 147.35-147.95 range with the top seen in NY on the rise in the 10-year Treasury yield to 4.27% from 4.25 earlier today. Japanese markets were closed for Mountain Day holiday. Gains were hampered by soft US Treasury yields.

AUDUSD
AUDUSD traded sideways in a 0.6505-0.6529 range due to a lack of actionable economic data. The RBA meeting tomorrow is expected to result in a 25 bp rate cut to 3.60%.

USDMXN
USDMXN traded lower in a 18.5680–18.6039 band then climbed in NY reaching 18.6386 due to broad based US dollar demand.

USDCNY

PBoC fix: 7.1405 vs exp. 7.1845 (Prev. 7.1382)

The Shanghai Shenzhen CSI 300 rose 0.43% to 4122.51

Trump’s tariffs on Chinese exports to the US could soar to 145% tomorrow unless Trump agrees to another 90 day extension. Currently, China pays a 20% tariff for smuggling fentanyl, plus a 10% baseline tariff.

Negotiations aside, US VP Vance said Trump could impose a 25% tariff on all Chinese imports as a penalty for buying sanctioned Russian oil.

China CPI rose 0.4% m/m in July (forecast 0.3%, previous -0.1%) and 0% y/y (previous  0.1%). PPI fell 3.6%, the same as in June.

FX High, Low, Open

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics