– Trump renews personal attacks on Powell
– US ADP employment data focus
– US dollar steady but on the defensive.
USDCAD open 1.3651, Range July1-July 2, 1.3592-1.3670, close 1.3646, WTI 65.65, Gold 3242.07
The Canadian dollar traded with a bullish tone yesterday before retreating following a resilient US JOLTS report and comments from Fed Chair Powell indicating no immediate changes to interest rate policy, which lent the greenback some support.
Trade negotiations between Canada and the US are back on the table after Prime Minister Mark Carney scrapped the proposed Digital Services Tax (DST) targeting American tech giants. While Trump welcomed the decision, many Canadians were equally relieved. The concern was that the full cost of the DST would have been passed along to Canadian consumers, leading to higher bills and increased GST charges.
Today’s FX direction will hinge on the release of US ADP employment data, with markets expecting a jump to 95,000 from May’s 37,000, as well as any fresh developments related to the so-called Big Beautiful Bill, which is due for another vote in the House.
There are no domestic economic releases scheduled for Canada today.
EURUSD moved between 1.1762 and 1.1829 yesterday and weakened further in NY trade. The downward pressure came after a relatively firm US JOLTS report. Comments from several ECB officials, including President Christine Lagarde, flagged supply disruptions as a concern but maintained that interest rates would still trend lower. Meanwhile, EU negotiators are reportedly open to accepting a 10% base tariff from the United States, provided Washington reduces duties on other goods such as autos and pharmaceuticals—another apparent victory for Trump.
GBPUSD has been consolidating gains from last week within a 1.3638–1.3790 band. The currency is under mild pressure following dovish remarks from Bank of England Governor Andrew Bailey, who pointed to cooling growth and a softening jobs market as reasons for a more gradual easing in monetary policy.
USDJPY remained inside its previous 142.70–144.36 band, with the low coming after Japan’s Tankan survey surprised to the upside. That strength briefly weighed on USDJPY before a modest rebound on the back of US data and Fed Chair Powell’s steady policy tone. Bilateral trade talks between Japan and the US are in focus, with Trump threatening to impose 30–35% tariffs if Japan refuses to buy American rice by his July 9 deadline.
AUDUSD traded in a 0.6554–0.6592 range, initially pressured by a soft S&P Global June Manufacturing PMI (50.6 vs. forecast 51.0), though those losses were offset by better Chinese factory data. Weaker building permits and sluggish retail sales data released overnight contributed to the pair’s rangebound behavior.
