The prospects of the US-Canada negotiations are unclear, USD/CAD is hovering at 1.3700, and the FOMC minutes show a hawkish tendency, which exacerbates the market's wait-and-see sentiment
2025-07-10 15:33:57
The dollar consolidates as the market awaits progress in trade talks
During the Asian trading session on Thursday, the USD/CAD exchange rate remained in a narrow range around 1.3700. Investors were generally on the sidelines, waiting to see whether there would be any substantial progress in the negotiations between the United States and its major trading partners, such as Asian countries, the Eurozone, Canada and Mexico.
According to the latest news, the US President has issued a tax increase decision on 21 countries that have not reached an agreement within the "90-day tariff suspension period", including an additional 25% import tariff on Japan and South Korea.
According to market surveys, companies remain wary of a new round of trade concerns that may be triggered by increased tariffs, and the foreign exchange market is trading cautiously against this backdrop.
The hawkish tendency of the Fed minutes strengthens the short-term support of the US dollar
The minutes of the Fed's June 17-18 meeting showed that most members did not support adjusting interest rates in the short term unless it was confirmed that the inflation caused by tariffs was only temporary. In contrast, the US President continued to criticize the Fed Chairman for not actively cutting interest rates.
This further strengthened the market's expectation that the Federal Reserve will remain on hold in the short term, curbed the sharp fluctuations of the US dollar, and also made the Canadian dollar exchange rate lack trend driving in the short term.
Canadian employment data could be key catalyst for cost week
In Canada, the June employment data to be released on Friday will be the key focus. If the data is strong, it may strengthen the reason for the Bank of Canada to maintain its tight policy, thereby supporting the Canadian dollar; otherwise, it may push USD/CAD up and break through the current range.
An analyst from a Canadian economic research institute said: "The June employment data is a key data point for judging the policy direction of the Bank of Canada."
Technical charts show that USD/CAD is still running within the range of Wednesday. It rebounded to the 20-day exponential moving average (EMA) several times before falling back under pressure, forming an obvious "sell on rallies" trend. The 14-day relative strength index (RSI) is stable around 50, indicating that the market lacks a clear direction.
If it falls below the low of 1.3540 on June 16, it may further point to the psychological support level of 1.3500, or even test the low of 1.3420 on September 25 last year.
On the contrary, if it effectively breaks through the May 29 high of 1.3820, it is expected to open up upside space to the May 21 high of 1.3920, or even test the May 15 year high of 1.4000.
Editor's opinion:
USD/CAD is currently in a state of oscillation with unclear direction, which reflects the uncertainty of the outcome of the US-Canada negotiations, Canadian employment data and the Fed's policy path. The technical chart suggests that the long and short forces are balanced. Pay close attention to the results of Canadian employment data this Friday, which will directly affect the outlook for the Canadian dollar and the subsequent breakthrough direction of the currency pair.
During the Asian trading session on Thursday, the USD/CAD exchange rate remained in a narrow range around 1.3700. Investors were generally on the sidelines, waiting to see whether there would be any substantial progress in the negotiations between the United States and its major trading partners, such as Asian countries, the Eurozone, Canada and Mexico.
According to the latest news, the US President has issued a tax increase decision on 21 countries that have not reached an agreement within the "90-day tariff suspension period", including an additional 25% import tariff on Japan and South Korea.
According to market surveys, companies remain wary of a new round of trade concerns that may be triggered by increased tariffs, and the foreign exchange market is trading cautiously against this backdrop.
The hawkish tendency of the Fed minutes strengthens the short-term support of the US dollar
The minutes of the Fed's June 17-18 meeting showed that most members did not support adjusting interest rates in the short term unless it was confirmed that the inflation caused by tariffs was only temporary. In contrast, the US President continued to criticize the Fed Chairman for not actively cutting interest rates.
This further strengthened the market's expectation that the Federal Reserve will remain on hold in the short term, curbed the sharp fluctuations of the US dollar, and also made the Canadian dollar exchange rate lack trend driving in the short term.
Canadian employment data could be key catalyst for cost week
In Canada, the June employment data to be released on Friday will be the key focus. If the data is strong, it may strengthen the reason for the Bank of Canada to maintain its tight policy, thereby supporting the Canadian dollar; otherwise, it may push USD/CAD up and break through the current range.
An analyst from a Canadian economic research institute said: "The June employment data is a key data point for judging the policy direction of the Bank of Canada."
Technical charts show that USD/CAD is still running within the range of Wednesday. It rebounded to the 20-day exponential moving average (EMA) several times before falling back under pressure, forming an obvious "sell on rallies" trend. The 14-day relative strength index (RSI) is stable around 50, indicating that the market lacks a clear direction.
If it falls below the low of 1.3540 on June 16, it may further point to the psychological support level of 1.3500, or even test the low of 1.3420 on September 25 last year.
On the contrary, if it effectively breaks through the May 29 high of 1.3820, it is expected to open up upside space to the May 21 high of 1.3920, or even test the May 15 year high of 1.4000.
Editor's opinion:
USD/CAD is currently in a state of oscillation with unclear direction, which reflects the uncertainty of the outcome of the US-Canada negotiations, Canadian employment data and the Fed's policy path. The technical chart suggests that the long and short forces are balanced. Pay close attention to the results of Canadian employment data this Friday, which will directly affect the outlook for the Canadian dollar and the subsequent breakthrough direction of the currency pair.
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