Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3970-1.4220
Euro 1.5950-1.6200
Sterling 1.8720-1.8970
WTI Oil (opening level) $88.15
The CAD/USD is opening at 1.4096 ( 0.7094 )
WTI oil price gains ground for the second successive day,.Crude oil prices surge as supply risks intensified across several key export routes, extending well beyond the Middle East.
The USD/CAD pair holds ground as the USD struggles despite growing risk aversion tied to escalating geopolitical tensions between the United States and Iran.
A sustained strength above the 200-period SMA at 1.4104 should pave the way for additional gains to the 50.0% retracement at 1.4128 and the 61.8% Fibo. level at 1.4158, with 1.4200 and 1.4253 marking deeper Fibonacci barriers into the recent swing high.
On the downside, initial support emerges at the 23.6% Fibo. retracement at 1.4062, ahead of the structural floor near 1.4004. A convincing break below these levels would undermine the current consolidation and reopen a broader corrective phase.
Headlines
· The US-Iran conflict entered an 11th day, with Washington and Tehran exchanging strikes and President Trump playing down the prospect of near-term talks while vowing to respond if Houthi militants disrupt Red Sea shipping. Mediators are reportedly proposing a ten-day ceasefire. The escalation has kept a risk premium in oil and reinforced the market's inflation focus.
· Trump set out a steep tariff on generic drugs, at 100% from August 2028 and rising to 200% from August 2029, with a two-year tariff-free window from August 2026. Separately, he threatened new 50% tariffs on selected Canadian goods, and a 10% universal tariff on Taiwan is due to expire on 24 July, with Taipei reportedly negotiating a final rate.
· UK politics stayed in focus after new Prime Minister Andy Burnham named former Defence Secretary John Healey as chancellor, with both pledging fiscal discipline. ONS data showed June public sector borrowing of £16 billion, around a third lower than a year earlier and below forecasts, offering some relief to gilt investors after last week's selloff.
· European data improved: Germany's ZEW economic sentiment index climbed to 26.3 in July, its highest since February, on better prospects for export-oriented industry. Japan swung to a June trade deficit of ¥406.9 billion as imports jumped 25.4% to a record on strong domestic demand, while exports rose 19.3% on robust semiconductor shipments.
Key Points
· Equities: US and European equities rebounded with semiconductors, while Asian markets followed, led by a sharp rally in South Korean chips.
· Volatility: VIX fell back below 18 as the chip rebound extended, with megacap tech earnings the next test
· Digital Assets: Crypto equities and miners rallied with the tech bounce while spot held broadly flat
· Commodities: Crude extended its rally on Middle East supply risk, gold pushed higher and copper firmed
· Fixed Income: Treasuries sold off, the 10-year yield reaching a two-month high on oil-driven inflation concerns
· Currencies: The dollar firmed for a fifth session and the yen slid past 163 to a multi-decade low