Jul 04, 2025 (Baystreet.ca via COMTEX) --
- Quiet trading day ahead as US markets are closed.
- Tariffs and tariff deadlines weighing on risk sentiment.
- US dollar little changed but with bearish outlook.
USDCAD open 1.3591, overnight range 1.3567-1.3596, close 1.3582, WTI 66.28 Gold 3334.97
The Canadian dollar is directionless and rangebound with direction linked to the prevailing US dollar sentiment. The USDCAD technical picture is bearish but there is a lot of support between 1.3510 and 1.3550 which will limit downside moves. The downside is further supported by the fundamentals which paint a picture of a sluggish economy flirty with a recession due to Trump's trade war.
US markets are closed today as Americans celebrate Independence Day which suggests a very quiet trading session ahead.
Tariffs are front and center ahead of Trump's July 9th trade deal deadline. Faced with the logistical nightmare of renegotiating 170 trade agreements at once, President Trump is shifting strategy. The administration now plans to send batches of letters to 10 to 12 countries at a time declaring pre-set tariffs of 10-20%, or in some cases, as high as 60-70%.
The passage of Trump's Big Beautiful Bill and the massive increase in government debt as a consequence is putting downward pressure on the US dollar. However, yesterday's better than expected US data (nonfarm payrolls, weekly jobless claims, Services PMI) supports Fed Chair Powell's stance of leaving US interest rates at current levels until he can get a better handle on the impact of Trump tariffs on inflation.
Asian stock markets didn't move much. The ASX 200 in Australia and Japan's Topix finished flat, while the Hang Seng in Hong Kong slipped 0.64%. European equities are under pressure, likely spooked by the looming threat of Trump's tariffs. The CAC in France is down 0.90%, the DAX in Germany fell 0.66%, and the UK's FTSE 100 is off 0.34%. S&P 500 futures are down 0.57%. Gold is trading near $3334.50, and the US 10-year Treasury yield has climbed to 4.322%.
EURUSD found some modest support in a 1.1753 to 1.1786 band as traders tried to claw back some of yesterday's losses. Optimism is muted, though, with a looming July 9 deadline from the Trump tariffs deadline on the EU. Soft Eurozone PPI numbers and another drop in German factory orders were largely ignored by markets.
GBPUSD was stuck in a narrow 1.3645 to 1.3682 range. A slight improvement in the UK Construction PMI to 48.8 helped sentiment a little, but momentum was held in check following stronger-than-expected US employment data yesterday.
USDJPY eased within a 144.18 to 144.98 range as traders dialed back some of the recent gains spurred by the NFP report. Support remains tied to the rising US 10-year Treasury yield, which moved from 4.185% earlier in the week to 4.322% today.
AUDUSD stayed confined to its weekly range of 0.6549 to 0.6580. Waning enthusiasm for imminent US rate cuts has weighed on upside momentum, although optimism over a potential China-US trade deal is helping limit the downside.
COMTEX_466924331/2559/2025-07-04T11:42:05
