July 9, 2025
USDCAD open 1.3665, overnight range 1.3660-1.3710, close 1.3660
USDCAD is at the top of its overnight range, supported by Trump’s latest attack on the Canadian economy. Trump plans to announce a 50% tariff on copper which is a nasty blow to Canadian exporters who are America’s second largest supplier.
WTI oil traded higher in a 67.79-68.93 range with prices underpinned by renewed attack on shipping in the Red Sea. Traders ignored yesterday’s API data showing US crude inventories increased by 7.1 million barrels last week.
There are no economic releases of note from the US or Canada, leaving traders to bide their time until the FOMC meeting minutes are released this afternoon.
USDCAD Technical Outlook:
The intraday technicals are bullish above 1.3650 and are looking for a break above 1.3710 to extend gains to 1.3750. Intraday momentum indicators are mildly bullish. A break below 1.3650 targets support in the 1.3610-30 zone.
Longer term, USDCAD is looking for a test of 1.3750 which if broken points to further gains to 1.3950. Failure to break above 1.3750 suggest a drop to 1.3600.
For today, USDCAD support is 1.3650 and 1.3610. Resistance is 1.3710 and 1.3750 Today’s Range 1.3630-1.3730
Copper Tariff Road
Trump is in full-tariff mode. In addition to planning to send another dozen letters to various trade partners today and tomorrow, he decided that pharmaceutical and copper imports needed special attention—a 50% tariff on copper and up to 200% on pharmaceuticals. The market reaction in those two sectors was predictable, but traders mostly ignored the promise of more letters. The new tariff deadline is August 9, but the TACO trade sentiment abounds.
FOMC-Doves or Hawks.
Today’s FOMC minutes should reveal if the policymakers are as dovish as Governors Christopher Waller and Michelle Bowman implied. Those people were advocating a rate cut in July and seemed to be at odds with Fed Chair Powell’s wait-and-see approach.
Droning on
Trump’s Ukraine/Russia peace negotiations have been lost in the hoopla of the tariff onslaught. Putin is playing Trump for a chump, pretending to want peace, while unleashing massive drone attacks, including a 728-drone attack overnight. Trump is promising more weapons for Ukraine which may have prompted the latest attack.
Taking Stock
Asian equity traders were not impressed with the copper and pharmaceutical tariff news. Australia’s ASX 200 fell 0.61% and the Hang Seng index lost 1.06%. Japan’s Topix managed a 0.41% gain.
European traders ignored the tariff news and Russia’s latest aggression in Ukraine. The major indices are in the green led by a 1.30% rise in the French CAC 40 and a 1.19% gain in the German DAX. S&P 500 futures are up 0.23% while the US 10-year Treasury yield sits at 4.42%. Gold (XAUUSD) fell to 3291.45 from a peak of 3308.03 as o 5:30am PDT.
EURUSD
EURUSD traded choppily in a 1.1702-1.1730 range due to uncertainty surrounding EU/US tariffs and ahead of the FOMC minutes. EURUSD has climbed steadily since March and that rally may be running out of steam. Trump hinted that the EU could be the recipient of one of his trade letters on Thursday.
GBPUSD
GBPUSD is trading with a modest bid in a 1.3565-1.3609 range as it attempts to claw back yesterday’s losses. Traders are cautious due to Trump’s incessant tariff actions. Nevertheless, the GBPUSD uptrend line from April is intact while prices are above 1.3480.
USDJPY
USDJPY traded in a 146.53-147.18 range, peaking in Asia then sliding during the European session. Trump’s 25% tariffs on automobiles effectively derailed the BoJ plans to raise interest rates due to the increase in economic uncertainty. USDJPY is trading with a bullish bias inside the 142.20-148.70 range that has contained price action since April.
AUDUSD
AUDUSD churned in a 0.6510-0.6545 range supported by yesterday’s RBA decision to leave interest rates unchanged at 3.85%. Traders are marking time until the FOMC minutes are released.
NZDUSD
NZDUSD dropped and popped in a 0.5976-0.6015 band following the RBNZ decision to leave rates unchanged at 3.25%. The result was widely expected but policymakers left the door open to a rate cut in August if inflation pressures continue to ease, as expected.
USDMXN
USDMXN spiked to 18.7396 after Trump said he would slap a 50% tariff on copper imports but the lack of details allowed USDMXN to open near the bottom of its 18.5765-18.6275 overnight range. Mexico is directly impacted as it is the third largest supplier to the US, behind Canada and Chile. Mexico CPI data is on tap.
USDCNY
PBoC fix: 7.1541 vs exp. 7.1806 (Prev. 7.1534)
Shanghai Shenzhen 300 fell 0.18% to 3991.40
China CPI rose 0.1% y/y but fell 0.1% m/m in June
China PPI fell 3.6% y/y in June (previous -3.3%), its worst level in nearly 2 years due tariff uncertainty.
FX High, Low, Open
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance
