- Trump planning another “Liberation Day-style” tariff raid
- Oil prices rise on as Middle East tensions escalate
- USD opens with gains due to negative risk sentiment
USDCAD open: 1.4097, overnight range 1.4083-1.4112, close 1.4107, WTI 88.27, Gold 4117.19
The Canadian dollar is sinking due the weight of Trumps news tariff barrage aimed at Canada and another salvo aimed at Canada and the rest of the world. The news added to the negative sentiment stemming from the escalation of hostilities in the Middle East and Trump saying he is in no hurry to talk about a ceasefire.
WTI oil prices rallied in a 84.48-88.61 range and are consolidating the gains in NY. The escalating Middle East crisis and the closure of two key oil transportation waterways has underpinned prices.
Washington is preparing fresh Section 301 duties targeting goods from 60 leading trade partners, pointing to weak enforcement around forced labour standards as the justification. Under the proposal, Canada, Mexico, the EU and UK would face a 10% rate, while China, India and Japan would see 12.5%.
Asian equity markets were mixed as Japan reopened for trade, with the Topix jumping 2.44%. Hong Kong's Hang Seng and Australia's ASX 200 both finished little changed.
As of 7:40 am, European equities are edging higher across the board. London's FTSE 100 has gained 1.31%, the French CAC 40 is up 0.96%, and the German Dax has risen 0.35%. S&P 500 futures are down 0.35%, the 10-year Treasury yield sits at 4.641%, and the DXY is 101.17.
EURUSD bounced in a 1.1397-1.1418 band hampered by a lack of actionable EU data. Thursday's ECB decision is expected to produce no change to rates, though a handful of analysts are pencilling in a September move given the recent climb in crude.
GBPUSD drifted inside a 1.3366-1.3396 range, sandwiched between its 100-day moving average at 1.3379 and the 200-day at 1.3344. UK inflation data was mixed with headline CPI cooling to 2.6% in June from 2.8%, while core was unchanged at 2.6%. The data supports the BoE leaving rates unchanged.
USDJPY consolidated in a 162.67-163.23 corridor after tagging a near-40-year peak of 163.24, propelled by higher US Treasury yields and firming crude. Persistent supply risk from the Middle East conflict is complicating the BoJ's path toward policy normalization, and desks remain wary of intervention.
AUDUSD hugged a tight 0.6990-0.7013 range as traders held back ahead of Thursday's employment report, with geopolitical tensions adding a further reason for caution.
There are no top tier US or Canadian economic reports today.
