Dollar Under Pressure as Debt Fears Grow, Tariff Moves Stir Uncertainty

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3470-1.3710

Euro                 1.5900-1.6250

Sterling            1.8430-1.8690

WTI Oil (opening level) $67.29

The CAD/USD is opening at 1.3581 ( 0.7363 )

The US Dollar remains under selling pressure amid mounting US debt concerns, tariff policies uncertainty and rising interest rate cut bets. The USA markets will be closed tomorrow for the July 4th holiday, so look for only modest movement in the market until Monday.

Headlines

·    In June 2025, US ADP private businesses lost 33K jobs, marking the first decline since March 2023, following a revised loss of 29K in May, and falling short of the forecasted 95K job gain.

·    Trump continued criticizing Federal Reserve Chair Jerome Powell, urging him to resign. Without naming him directly, Trump posted on Truth Social that "'Too Late' should resign immediately," criticising Powell for delayed interest rate cuts. Trump wants a chair who will support his economic agenda, including cutting interest rates

·    Trump announced on Truth Social that the US has completed a trade agreement with Vietnam, featuring a 20% tariff on Vietnamese imports, which is notably lower than the 46% rate established in April. Goods that are deemed to have been transshipped, i.e. coming mostly from China will be levied at 40%. Beijing has made clear that it would respond to deals that came at the expense of Chinese interests

·    Keir Starmer's office scrambled to express support for Chancellor of the Exchequer Rachel Reeves after the Prime Minister failed to back her in parliament following a U-turn on the government's flagship welfare reforms, leaving er facing a widening fiscal hole of more than £6 billion to fill. The initial lack of commitment to Reeves prompted markets to slump.

Key Points

·    Equities: US tech rally, tariff relief, UK political stress, Asia mixe

·    Volatility: VIX stays low, SPX expected move ±33pts, jobs data ahead

·    Digital assets: Bitcoin, Ethereum, IBIT, ETHA higher; Ripple, COIN, MSTR in focus

·    Fixed Income: Gilts-led weakness across global bond markets

·    Currencies: Broad but limited dollar gain led by GBP slump

·    Commodities: Gold trades higher ahead of jobs report. Copper market tightness