USDCAD: open 1.3819, overnight range 1.3801-1.3830, close 1.3808, WTI 61.32, Gold 3296.85
The Canadian dollar had a choppy May, bouncing between 1.3690 and 1.4015 but it is poised to finish the month almost right where it started. Inflation, interest rates, and Trump’s tariff war dominated and that won’t change in June.
USDCAD traders are awaiting Canada’s March GDP data and expecting growth to return with a 0.1% increase compared to the 0.2% drop in March. In addition, the US Core-Personal Consumption Expenditures (PCE) price index is expected to rise 0.1%. A higher-than-expected number would support USDCAD as it would reinforce the outlook for no Fed rate cut until September.
A federal appeals court in the U.S. has paused the implementation of a Court of International Trade ruling that would have scrapped Trump-era tariffs.
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Fed Chair Jerome Powell met Trump at the White House. The Fed statement said that Powell avoided offering any policy forecasts, instead emphasizing that future decisions would be guided entirely by incoming economic data and how it affects the broader outlook.
Equity indices are closing the month on a strong note. Australia’s ASX 200 gained 0.30%, and Japan’s Topix fell 0.37%.
European stocks are also higher, with Germany’s DAX gaining 0.94% while S&P 500 futures are flat. The U.S. 10-year yield is holding at 4.24%,
EURUSD traded in a 1.1323–1.1390 range but slipped from yesterday’s highs following the appeals court’s decision to delay the CIT ruling. Markets expect the ECB to cut rates by 25 basis points next week, and that view is already fully priced in.
GBPUSD bounced in a 1.3455–1.3511 range but is trading near the overnight low. A business confidence survey by Lloyds Bank showed an 11-point gain, reversing April’s 10-point slide, but the news did little to stir interest.
USDJPY is trading negatively in a 1.44–144.24 range with prices pressured by a slightly hotter than expected Tokyo inflation reading of 3.6% y/y.
AUDUSD traded quietly in a 0.6408–0.6453 range with gains capped by after April retail sales declined 0.1%, missing the forecast for a 0.3% increase.
Other US data includes Michigan Consumer Sentiment, inflation expectations, Chicago PMI, and the trade balance.
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