USDCAD: open 1.3970, overnight range 1.3901-1.3988, close 1.3939, WTI 62.91, Gold 3215.49
The Canadian dollar suffered a one-two punch. The shot to the nose came after another very weak employment report on Friday, and today’s news of a tariff détente between China and the US was the uppercut that knocked the Loonie into the ropes.
The big story is that the U.S. and China agreed to a 90-day suspension on a substantial portion of tariffs. Treasury Secretary Scott Bessent noted over the weekend that both delegations were aligned in not wanting a decoupling. The greenback responded accordingly, with the U.S. dollar index jumping from 101.45 at Friday’s close to 101.79. Equity sentiment was equally enthusiastic, as S&P 500 futures surged 2.80%, and the 10-year Treasury yield climbed to 4.44%.
The easing of trade tensions between the world’s two largest economies fueled a surge in the U.S. dollar against major counterparts and lifted global equity indices. Asian markets closed higher, led by Hong Kong’s Hang Seng, which gained 2.90%, and Japan’s Topix edged up 0.31%.
European stocks followed suit, helped along by renewed dialogue between Ukraine and Russia. France’s CAC 40 led the charge with a 1.63% rise, trailed by Germany’s Dax up 1.16%, and the UK’s FTSE 100 posting a 0.32% gain. S&P 500 futures have soared and are up 3.03%. Gold prices slumped, sliding from 3325.00 at Friday’s close to 3213.25.
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EURUSD opened in New York at 1.1120 after sliding from an overnight range of 1.1083 to 1.1243. The announcement from Washington and Beijing has shifted the focus to the possibility that tariff relief may support economic growth while nudging inflation higher, at least temporarily. Meanwhile, the European Central Bank remains on alert for disinflation and is expected to maintain an easing bias.
GBPUSD traded in a 1.3160 to 1.3300 band, with the currency pair giving back all the gains it made following last week’s U.S.-UK trade announcement. The pullback appears driven by renewed U.S. dollar strength, underpinned by expectations the Fed will hold rates steady while the Bank of England leans dovish.
USDJPY rallied from 145.70 to 148.23 before retreating to 147.95 in NY overnight. The gain was in response to the U.S.-China ceasefire, which prompted investors to unwind safe-haven trades.
AUDUSD is little changed compared to Friday and ranged in a 0.6393–0.6462 band. Traders initially reacted to the upbeat China-U.S. developments by buying Aussie, only to fade the move before the New York open as expectations for continued RBA dovishness resurfaced.
The US and Canadian economic calendars are empty.
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