Jun 30, 2025 (Baystreet.ca via COMTEX) --
- Canada backs down from digital tax-US/CAD trade talks restart
- Canadian markets are closed tomorrow
- US dollar trading with negative bias.
USDCAD open 1.3680, overnight range 1.3654-1.3700, close 1.3683, WTI 65.36, Gold 3288.26
The Canadian dollar sank like a rock on Friday after Trump announced that "ALL discussions on Trade with Canada, effective immediately." The move came after Ottawa aligned with 18 other nations to impose a digital services tax affecting major American tech firms including Google, Meta, Amazon, Apple, and Uber--an action that clearly provoked a sharp response from Washington.
The move started to reverse after traders became convinced that it was just another Trump trade tactic. But Trump's reaction spooked Canadian authorities and on Sunday night they announced that the digital tax was scrapped.
Friday, Canada's April GDP came in below expectations, shrinking 0.1% month-over-month (versus a flat forecast), while March's reading was revised higher to 0.2%. However, the data had minimal market impact as attention turned to the softer US PCE Price Index, which modestly boosted expectations for a Fed rate cut. That in turn weighed on the greenback and lent support to USDCAD.
Crude oil prices fluctuated within a narrow band between 64.53 and 65.81, supported by OPEC production concerns and tempered by a reduction in Middle East supply risks. Additional pressure came after Poland's Orlen announced it would let its Russian supply contract expire on June 30 without renewal.
Asian stock market indexes rose overnight. Australia's ASX 200 gained 0.33% and Japan's Topix added 0.43%.
European bourses are in the red: the DAX declined 0.21%, the FTSE 100 dipped 0.16%, and the CAC hovered near unchanged. The US 10-year Treasury yields is 4.245%. S&P 500 futures are up 0.41%.
EURUSD remained firm within a 1.1712 to 1.1751 band, supported by Friday's strength. Traders overlooked disappointing German retail sales and steady inflation data, keeping their focus squarely on US rate expectations.
GBPUSD moved within a 1.3691 to 1.3741 corridor, buoyed by broad US dollar softness. The dollar's bearish tone was reinforced by Trump's suggestion that Fed Chair Powell could be replaced, adding to rate cut speculation and supporting the British pound. The implementation of a new UK-US trade deal also provided an additional tailwind.
USDJPY dipped in Asia, falling from 144.65 to 143.78 before attempting a mild recovery to 144.20 as New York opened. The underlying themes--expectations of a Bank of Japan rate hike and potential US rate cuts--continue to cap gains, while softening Treasury yields apply downward pressure on the greenback.
AUDUSD traded unevenly between 0.6523 and 0.6553. Support came from a weaker US dollar and an uptick in risk appetite amid signs of easing US-China trade tensions. The Australian dollar also found footing after the TD-MI inflation gauge for June posted a 0.1% monthly rise, reversing the prior month's 0.4% decline.
Today's US data includes Chicago PMI.
COMTEX_466811996/2559/2025-06-30T16:28:09
