USD / CAD - Canadian dollar drifting
- Trump sends tariff letters-punts tariff deadline to August 1.
- Global equities shrug off tariff letter news.
- US dollar opens mixed-EUR retreats, AUD rallies.
USDCAD open 1.3651, overnight range 1.3638-1.3684, close 1.3683, WTI 67.42, Gold 3332.42
The Canadian dollar danced inside yesterday’s range as traders digest the latest tariff developments. Once again, Trump has extended the tariff deadline, from July 9 to August 1.
So far, Canada has not received a Trump tariff letter as tariff negotiations are continuing. Prime Minister Mark Carney wants a deal by July 21 or he will retaliate for the 25% tariffs on Canadian steel and aluminium.
WTI oil trade quietly in a 67.33-67.94 range. Increased demand due to the US summer driving season is being offset by Opec’s latest production increase.
President Trump dispatched letters to leaders of countries including Japan, South Korea, and South Africa, expressing how privileged he felt to impose tariffs ranging from 25% to 40% on their exports to the US. A class act. The market had already priced in the move, with the new tariff deadline now pushed to August 1.
Asian equities largely ignored the trade drama and advanced. Hong Kong’s Hang Seng gained 1.09%, Japan’s Topix edged up 0.17%, and Australia’s ASX 200 finished flat. In Europe, stocks opened higher with Germany’s DAX up 0.37%, while the UK FTSE 100 rose 0.14%.
France’s CAC was flat. US equity futures are treading water, and the US 10-year Treasury yield spiked to 4.41% from 4.254% a day earlier. Gold is holding firm near $3325.75.
EURUSD traded in a 1.1708–1.1766 band, peaking early before drifting to 1.1734 in New York. Traders are hoping for a US/EU trade deal.
The EU hasn’t received an official letter from Washington, but with 450 million consumers, Brussels still holds bargaining power.
GBPUSD bounced in a 1.3586–1.3647 range, retreating to the lower end during NY trading. The UK avoided Trump’s tariff crosshairs, likely due to Prime Minister Keir Starmer’s timely pilgrimage to D.C. to pay homage to “The Donald.” Meanwhile, Britain’s fiscal future looks grim. The Office for Budget Responsibility warned public debt could balloon to 270% of GDP by 2070—nearly triple today’s level. Still, Goldman Sachs remains optimistic, projecting further gains in GBPUSD this year.
USDJPY firmed in a 145.83 -146.45 range, lifted by reports that Trump sent a letter to Prime Minister Shigeru Ishiba that it was Trump’s “great honor” to be impose “just a 25% tariff” on Japanese imports into the US. . The tone letterhelped dampen expectations for a hawkish tilt at the Bank of Japan’s July 31 meeting.
AUDUSD surged in a 0.6490–0.6558 range after the RBA left interest rates unchanged at 3.85%, surprising a market that leaned toward a hike. The central bank is opting for patience, awaiting further signs that inflation is cooling. The NAB Business Survey for June provided some encouragement, with Business Conditions rising to 9 and Confidence to 5, up from zero and two respectively in May.
Today’s data includes the Canadian Ivey PMI index.
