USD / CAD - Canadian dollar spinning its wheels
- Cautious start to trading ahead of key US data this week and month end flows.
- Global equities rise on improved risk sentiment.
- US dollar dips on improved risk sentiment.
USDCAD: open 1.3872, overnight range 1.3850-1.3893, close 1.3856, WTI 62.72, Gold 3274.26
The Canadian dollar continues to drift aimlessly with the same range that has contained price action since Thursday.
It is a big day for Canadians. Today is the day voters decide if 10 years of Liberal rule is enough, or if they have earned the right for another mandate. If they win, their massive new spending plans may be a negative for the loonie. A Conservative win should support the loonie due to that party’s favourable view on oil and energy. Regardless, fade any currency reaction in the aftermath of the election news, as Trump’s tariffs are still driving the loonie bus.
Asian equity markets closed higher. Japan’s Topix rose 0.86% and Australia's ASX 200 edged up 0.36%. European equity markets are firmer led by the German Dax (up o.62%). S&P 500 futures slipped 0.15%, and the U.S. 10-year Treasury yield firmed to 4.28%. Gold (XAUUSD) is trading lower and sits at 3289.00 in New York trading.
EURUSD drifted in a 1.1330-1.1381 range overnight. Prices are treading water after Friday's session, with traders leaning toward expectations for a June ECB rate cut. The recent EURUSD strength appears to be capping gains for now, although the technical picture remains bullish as long as prices stay above the 1.1250-1.1270 area.
GBPUSD chopped about in a1.3280-1.3354 band with a lack of fresh news to drive direction. Upside potential is tempered by concerns that Trump’s tariffs will hammer the domestic economy. The EY ITEM Club, a well-respected UK forecasting group, downgraded its 2025 GDP growth estimate to 0.8% from 1.0%, and cut its 2026 forecast to 0.9% from 1.6%, blaming the hit on new U.S. tariffs.
USDJPY traded in a 143.30-143.89 range overnight. Traders are staying cautious ahead of developments in U.S./Japan trade negotiations and Thursday’s Bank of Japan policy meeting, where no changes are expected.
AUDUSD traded sideways in a 0.6368-0.6407 range. Some support was found on hopes that U.S.-China tensions are easing after Beijing exempted certain U.S. goods from tariffs last week. However, China's insistence that no formal talks are taking place with Washington casts doubt on the optimism.
There are no notable economic reports today.
