USD / CAD - Canadian dollar catches a bid
- Trump’s talks about naming successor to Powell, early.
- The wait until the US data dump keeping traders on the sideline
- US dollar opens with losses across the board.
USDCAD: open 1.3688, overnight range 1.3680-1.3730, close 1.3726, WTI 65.04, Gold 3340.80
The Canadian dollar jumped aboard the sell-US dollar bandwagon with enthusiasm. The move was triggered by reports that Trump would name a successor to Fed Chair Jerome Powell as early as September.
That kind of early nomination would create the perception of a parallel Federal Reserve and chip away at Powell’s authority during his remaining months in office. It also raises alarm bells about the political neutrality of the central bank.
Markets took notice. The US dollar was broadly sold, bond yields dropped, and safe-haven currencies caught a bid. Stocks turned skittish.
WTI oil traded in a 64.67–65.57 range with a negative tone. The Iran-Israel ceasefire has eased supply concerns, which removed a key source of recent gains. US-China trade friction and questions about Chinese crude demand continue to cap upside momentum. Meanwhile, the EIA reported a 5.83-million-barrel drawdown in US crude inventories.
Global equities had a mixed tone. Wall Street ended little changed, while the ASX 200 slipped 0.10% and Japan’s Topix added 0.81%. Hong Kong’s Hang Seng dropped 0.61%. European markets bucked the trend with Germany’s DAX rising 0.62%, France’s CAC 40 up 0.22%, and the UK’s FTSE 100 gaining 0.20%. S&P 500 futures climbed 0.29%. Gold (XAUUSD) rose to 3338.93 as of 6:15 am EDT.
EURUSD traded in a 1.1654–1.1745 range and is firm near 1.1721. Dollar weakness tied to Trump’s potential Fed nomination move, along with optimism about Eurozone fiscal stimulus after NATO’s 5% defense spending pledge, supported the rally. Traders ignored a slight dip in German GfK consumer sentiment (-20.3 vs. -20.0 prior).
GBPUSD ranged between 1.3655 and 1.3765 and is holding at 1.3745. The pair surged on speculation that Trump will replace Powell six months ahead of schedule. Price action has pushed into territory not seen consistently since late 2021. Rising UK borrowing costs remain a concern but are overshadowed by broad USD softness.
USDJPY fell within a 143.75–145.27 band and is trading near session lows. Market reaction to Trump’s early Fed succession talk drove demand for the yen as investors sought safe-haven assets. The drop in US 10-year Treasury yields—from 4.40% to 4.28%—added further downside pressure. Japan’s Economic Minister is in Washington today for trade discussions.
AUDUSD moved higher from 0.6505 to 0.6550 before pausing. The advance was fueled by improved risk sentiment and speculation surrounding Trump’s Fed pick. Gains were capped by expectations of a 25 bp rate cut from the RBA in July and caution ahead of US data releases.
There are plenty of US economic reports today. They include: Economic data due today includes May’s Durable Goods Orders (expected at 8.5% vs. -6.3% prior), the trade deficit (forecast -$88.5 billion), weekly jobless claims (seen unchanged at 245,000), PCE inflation numbers, pending home sales, and the Chicago Fed’s National Activity Index.
