- White House trade offer deadline today-comply or face higher tariffs
- Bank of Canada policy meeting today-no change in rates
- US dollar range trading ahead of NFP on Friday
USDCAD: open 1.3714, overnight range 1.3706-1.3732, close 1.3721, WTI 66.68, Gold 3362.88
The Canadian dollar shrugged off the latest tariff insult aimed directly at Canada. Trump hiked the steel and aluminum tariff on Imports to the US from a lofty 25% to a punishing 50% effective today. The news was expected.
The Bank of Canada is universally expected to leave its benchmark rate unchanged and since it is a statement-only event, the market impact will be negligible.
WTI oil prices are higher after the American Petroleum Institute reported that crude inventors fell by 3.3 million barrels last wee, WTI traded in a 63.07-63.73 range.
China supplies roughly 90% of the world’s rare-earth metals, and Trump’s trade tactics have thrown a wrench into the global supply chain for these materials, which are crucial to everything from phones and laptops to electric vehicles and jet fighters.
Beijing retaliated to Trump’s tariffs by tightening controls on outbound shipments of these rare-earth minerals, which has already forced several European carmakers and parts suppliers to shut their doors. Automakers in the US and Canada face the same risk.
Several Federal Reserve officials have pointed to the uncertainty around how tariffs might feed into inflation as a reason to keep rates steady, and that narrative gained support from the latest JOLTS job openings figures.
In equity markets, Australia’s ASX 200 led regional gains, rising 0.89%, while Japan’s Topix added 0.51%. European markets opened stronger as well — the CAC 40 is up 0.50% and the DAX has gained 0.56%. S&P 500 futures have gained 0.14% and the US 10-year yield is at 4.454%.
EURUSD traded in a 1.1357–1.1404 range as traders kept risk exposure limited ahead of the ECB’s policy decision. Markets are widely expecting a 25 bp rate cut. Services PMI data was uninspiring. S&P Global noted that while the bloc posted its fifth straight month of growth, the margin was narrow and the pace had cooled slightly from April.
GBPUSD was adrift in a1.3501–1.3546 band and remained largely directionless. The UK’s exemption from the fresh 25% steel and aluminum tariff made little difference, as the original 25% tariff still applies. Meanwhile, the Services PMI edged higher to 50.9 from 50.2.
USDJPY traded between 143.68 and 144.39 as it consolidated gains from earlier in the week. Traders were buoyed by improving risk appetite and growing doubt that the Fed will cut rates soon. The Bank of Japan continues to grapple with stubborn inflation, and Washington’s tariffs could complicate its path forward.
AUDUSD ranged from 0.6451 to 0.6481 following a disappointing Q1 GDP report that showed just 0.2% quarterly growth which was slower than the 0.6% previously. Analysts pointed to cautious consumer behavior and reduced government outlays as key reasons.
The ADP employment change report is expected to show the US added 115,000 jobs in May compared to the 62,000 gained in April. Later in the day, the ISM Services PMI index is forecast to inch up to52 from 51.6
