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• USD/CAD trades just above the 1.4100 handle, up around a fifth of one percent and rising for a second straight session after defending the 50-day average last week.
• Washington opens the week with a 50% tariff round on most Canadian goods while the US Trade Representative teases action against dozens more countries.
• Record US import prices show who actually pays for the tariff wall, and Ottawa is racing to the negotiating table anyway.

USD/CAD trades just above the 1.4100 handle into the North American afternoon, up around a fifth of one percent and on track for a second consecutive daily advance. The recovery follows the July slide from the year's high near 1.4250 down to the 50-day Exponential Moving Average (EMA), a floor the pair defended last week with the daily Stochastic Relative Strength Index pinned near zero. The bounce now has a fundamental author, because the trade war has found its way back to Canada's doorstep.

Fifty percent now, dozens of countries next

The White House opened the week with a fresh 50% tariff round on most Canadian goods, framed by administration officials as retaliation for alleged trade discrimination against US products. The follow-through arrived Tuesday, when US Trade Representative Jamieson Greer said on television that action against dozens of countries is coming soon, putting flesh on reports of a broader wave being prepared before the current 10% global regime expires.

The pair spent the London morning drifting to a session low just above 1.4050 before the North American bid took over and carried it to fresh highs through the 1.4100 handle. The tape read the queue of tariff headlines the way it usually does, as a US Dollar story first and a Canadian growth story second.

Ottawa's answer was to reach for the calendar rather than the retaliation list. Prime Minister Mark Carney has agreed to accelerated trade talks with Washington, a concession to the arithmetic of the United States-Mexico-Canada Agreement (USMCA) review cycle. The US declined to renew the pact in its current form at the 1 July joint review, tipping the process into annual reviews that run until the deal is extended or expires in 2036, and racing to a deal beats a decade in the waiting room.

The forecast said five, the White House said fifty

The awkward institutional detail is that the Bank of Canada's July Monetary Policy Report, finalised on 10 July, embedded an average US tariff rate on Canada of 5.0%, with 1.5% running the other way. Eleven days later, the posted number from the Trump administration on most Canadian goods is 50%. The report's Crude Oil conditioning was already conceded stale at the July press conference, and its tariff conditioning has now aged considerably worse.

The same document assumes the Loonie averages roughly 71 cents US across the projection horizon, and every cent below that assumption imports inflation into an economy already in technical recession. Markets have run that arithmetic to its conclusion. A Bank of Canada hike is fully priced by the 9 December meeting, and a currency leaking lower on tariff risk hardens the case rather than softening it.

The bill lands at the US border

The under-covered half of the story is who actually pays for a tariff wall, and June's import price data answered it before this round was even announced. The US import price index printed a record 150.8 points, the highest reading on a series running back to 1982, with the annual rate at 7.1%, the fastest since August 2022. The index excludes tariffs by construction, so rising border prices under the tariff regime mean exporters are not absorbing the duties. That surcharge lands on the administration's own consumers.

The domestic hiring pulse is not obviously braced for it either. ADP's weekly employment gauge slowed to a 16.5K four-week average at 12:15 GMT this morning, down from 19.25K and a fourth consecutive week of deceleration. A cooling labour market walking into a fresh import price shock is the shape the Federal Reserve meets next week, with markets still carrying a fully priced hike there by December as well.

The docket: Retail sales, flash PMIs, then the Federal Reserve

Canadian May retail sales open the local docket Thursday at 12:30 GMT, with consensus at 1% MoM headline and 1.4% ex-autos, both an acceleration, and an upside print would hand the December hike pricing another data point. Friday brings the preliminary July S&P Global Purchasing Managers Index (PMI) round out of the US at 13:45 GMT, with manufacturing expected at 54.5.

The heavier event sits the following Wednesday, 29 July, when the Federal Reserve decides at 18:00 GMT with no forecast round attached, before Canadian May Gross Domestic Product (GDP) figures land Friday 31 July at 12:30 GMT. Between a tariff shock, a stale forecast, and two central banks priced for hikes, the calendar offers the reclaim trade no shortage of catalysts.

Loonie technical levels

Resistance: The 1.4100 handle is the immediate cap, with the session high just above it. Through that, the 1.4150 June breakout shelf is the line the pair must reclaim to reopen the uptrend, and beyond it the year's high waits just below 1.4250.

Support: The session low just above 1.4050 is the first shelf. Beneath it, the 1.4000 handle and the rising 50-day EMA just above it form the floor that absorbed the July selling.

Bias: Bullish while the pair holds above the 50-day EMA near 1.4000. A daily close through 1.4150 opens a run at the year's high near 1.4250, while a daily close back beneath the 50-day EMA hands control to the sellers and puts the 200-day EMA just below 1.3900 in the frame.

USD/CAD 5-minute chart

Commerzbank’s Moses Lim and Dr. Henry Hao note that Singapore’s June non-oil domestic exports (NODX) growth moderated to 20.7% year-on-year but remained strong, with electronics exports surging on AI-related semiconductor demand. They stress that overall export prospects look resilient, as continued AI infrastructure investment should offset chemical-sector disruptions, while clearer global trade policies and easing Middle East tensions could support a recovery in non-electronics exports. USD/SGD trades near 1.2910.

AI demand supports NODX and SGD

"In H1 2026, NODX grew 18.6%, well above the government's full-year forecast of 3-5%, suggesting external demand remains resilient despite ongoing geopolitical and trade-related uncertainties."

"This suggests the global electronics upcycle remains intact, supported by sustained capex commitments from hyperscalers and cloud service providers."

"In addition, tariff-related headwinds could weigh on non-electronic exports."

"Nevertheless, the tariff impact may prove less severe than feared, given that most economies are expected to face a baseline 10% tariff on shipments to the US."

"Overall, the export outlook remains resilient as continued AI infrastructure investment could support electronic shipments and offset supply chain disruptions in the chemical sector."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Trump weighs ceasefire or full-scale Iran war, lifting safe-havens.
• Rising Oil prices fuel inflation and Fed hike concerns.
• Jobless claims and Fed decision anchor next policy catalyst.

Gold price surges on Tuesday during the North American session, up by more than 1.50% amid continued missile strikes between the US and Iran despite mediators' efforts to end the war. The XAU/USD trades at $4,071

XAU/USD gains as ceasefire doubts revive safe-haven demand

The yellow metal is gathering traction even as US Treasury yields and the Greenback register gains. Oil prices are also rising as Ansar Allah threatens to attack vessels in the Red Sea, adding to fears for Crude supply disruptions.

Newswires revealed that the US is demanding a longer ceasefire and partial navigation in Hormuz. Meanwhile, Iran proposed a 10-day ceasefire.

Other news showed that US President Donald Trump is considering whether to accept Iran’s 10-day ceasefire or to launch a full-scale war on Iran. A US official hinted that if the President chooses the latter, the strikes could target Tehran and Iran’s nuclear sites.

This week, the US economic calendar is quiet. The ADP Employment Change 4-week average decreased to 16.5K from 19.25K. On Wednesday, the docket is absent, followed by Thursday’s Initial Jobless Claims, leading up to the Federal Reserve’s (Fed) monetary policy meeting on July 29.

In the meantime, the US 10-year Treasury yield is rising by nearly 3.5 basis points to 4.628%, usually a headwind for Bullion, which tends to edge lower due to its non-yielding nature. Consequently, the US Dollar Index (DXY), which measures the US Dollar against six others, advances 0.12% to 101.11.

Expectations that the Fedmight increase the pace of rate hikes in 2026 are surging, driven by elevated Oil prices as Gulf supply disruptions stoke inflation fears and fuel speculation of higher interest rates for a longer period.

Prime Terminal data indicates a 78% probability that the Fed will hold rates steady at next week’s meeting, while the likelihood of a September hike is about 68%.

XAU/USD technical outlook: Gold price recovers yet is poised to consolidate

Gold is poised to continue trending sideways, though it’s trading near five-day highs approaching $4,100. Momentum is moderately bullish in the short term as the Relative Strength Index (RSI) is approaching the 50-neutral level.

From a market structure perspective, the trend is downward. To restart an upward trend, Gold needs to clear the resistance trendline circa $4,125. Once cleared, the next higher-high will be the July 10 high at $4,134, ahead of the July 6 peak at $4,202. A breach of the latter will put the 50-day Simple Moving Average (SMA) at $4,264 into play.

For a bearish continuation, Bullion needs to clear the $4,000 mark. Below is the July 17 low at $3,959, followed by $3,900. If sellers continue to drive prices lower, the next area of interest would be the October 28, 2025 low of $3,886.

• The US Dollar Index gains as escalating US-Iran tensions boost demand for the Greenback.
• Trump rejects talks with Iran and warns of further strikes on nuclear-linked sites.
• Rising Oil prices keep pressure on the Fed to maintain a restrictive policy stance.

The US Dollar Index (DXY) extends its gains on Tuesday as renewed tensions between the United States and Iran show no signs of easing, boosting demand for the safe-haven Greenback.

At the time of writing, the index, which tracks the Greenback’s value against a basket of six major currencies, trades around 101.18, near one-week highs.

US President Donald Trump maintained a hard-line stance during a White House press conference on Tuesday, dampening hopes for a diplomatic breakthrough.

Trump said Iran wanted to meet but that he had “no interest” in talks until Tehran was ready. He also warned that the US would target any site linked to Iran’s nuclear program and threatened heavy strikes on the Pickaxe Mountain area.

Trump’s remarks came as the US military carried out a tenth consecutive night of strikes against Iran on Monday, while Tehran launched attacks on US military assets across the region.

Dollar upside risk builds as Middle East tensions threaten oil and FX carry

Analysts at ING warn that "Dollar risks remain skewed to the upside today as markets continue to display a risky degree of complacency towards the military re-escalation," adding that "a move back to 101.50 in DXY looks entirely consistent with the current backdrop."

OCBC notes that "a larger escalation could revive fears of a prolonged supply shock and drive oil prices back above USD100/bbl," pointing out that "for perspective, Brent crude reached USD126/bbl in late April, around 40% above current levels." In their view, "such an outcome would likely trigger higher market volatility, erode the appeal of FX carry trades, and support a renewed USD rally."

Oil-driven inflation risks reinforce Fed’s tighter-for-longer stance

The rebound in Oil prices is rekindling inflation concerns and supporting expectations that the Federal Reserve (Fed) will maintain a tighter monetary policy stance or even raise interest rates as the central bank seeks to bring inflation back to its 2% target.

A Reuters poll released on Tuesday showed that all 104 economists expect the Fed to hold its benchmark rate at 3.50%-3.75% at its July 28-29 meeting, while 78 forecast no change through year-end.

Of the 67 economists who answered a separate question, 44 said the risk of a rate hike was high, a notable shift from last month, when 47 of 86 respondents viewed the risk as low.

OCBC’s Sim Moh Siong and Christopher Wong see USD/IDR easing modestly from recent highs, helped by S&P’s rating affirmation and Bank Indonesia’s prior tightening. However, elevated Oil prices, lingering fiscal concerns and still-soft portfolio inflows limit further IDR gains. They highlight 17970/18000 as a cap, with downside supports around 17820/840.

Policy support offsets Oil headwinds

"USD/IDR has eased modestly from recent highs, with the pullback appearing to be driven more by domestic-specific factors than any meaningful weakening in the broader USD."

"S&P’s affirmation of Indonesia’s BBB rating with a stable outlook helped to ease some of the near-term concerns around the sovereign credit story, while BI’s prior tightening and continued willingness to support the IDR have also provided a firmer policy anchor. BI MPC (22 Jul) will be closely watched on whether policymakers tighten further. "

"There may also be some position adjustment after the sharp rise in USD/IDR earlier this month, although there is not yet strong evidence of a sustained pickup in foreign portfolio inflows. "

"We would therefore view the recent IDR recovery more as tentative stabilisation than the start of a stronger appreciation trend. Elevated oil prices remain a key constraint, while lingering fiscal and domestic confidence concerns may still limit the extent of IDR gains."

"USD/IDR was last at 17940 levels. Daily momentum is mild bearish while RSI shows tentative signs of rising. 2-way trades likely for now. If the pair can stay capped under 17970/18000 (21 DMA), then downside pressure may gather momentum with next support at 17820/840 levels (50 DMA, 23.6% fibo retracement of 2026 low to high). Resistance at 18020, 18140 levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

United Overseas Bank’s (UOB) Quek Ser Leang expects USD/SGD to stay confined to tight ranges in the near term, with intraday price action lacking clear momentum. The strategist still flags a medium-term risk of a break below 1.2860, though the probability is low while resistance at 1.2930 caps the upside. A deeper correction would likely find solid support near 1.2805.

Dollar-Singapore Dollar stuck in tight band

"24-HOUR VIEW: USD closed little changed at 1.2920 (+0.09%) last Friday. When it was at 1.2915 in the early Asian session yesterday, we indicated that “the price action provides no fresh clues, and USD could trade in a range between 1.2900 and 1.2930.” USD subsequently traded in a quiet manner between 1.2898 and 1.2923, closing little changed at 1.2913 (-0.05%). Momentum indicators remain mostly flat, and we continue to expect USD to trade in a range, most likely between 1.2895 and 1.2925."

"1-3 WEEKS VIEW: Our most recent narrative was from last Thursday (16 Jul, spot at 1.2885), when we indicated that “downward momentum is starting to build, and should USD close below 1.2860, it could trigger a deeper decline.” USD traded in a quiet manner over the past few days, and downward momentum is starting to ease. However, as long as 1.2930 (no change in ‘strong resistance’ level) is not breached, the risk of USD breaking and closing below 1.2860 remains, though the odds are not high."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Commerzbank’s Dr. Henry Hao and Moses Lim highlight that the South Korean government has unveiled a major South Korean Won (KRW) internationalisation roadmap, including unlimited KRW transactions with foreign institutions from January 2027 and broader access to onshore markets. They argue these reforms should lower the risk premium, deepen offshore liquidity and improve foreign access, even as greater internationalisation may heighten KRW sensitivity to global risk sentiment. USD/KRW fell to 1,478 on exporter-driven Dollar sales.

KRW roadmap boosts offshore access

"The South Korean government unveiled a broad package of measures to internationalise the KRW following the launch of 24-hour FX trading in early July. The reforms represent one of the most significant steps to liberalise the currency in years, aimed at improving offshore liquidity and foreign investors’ access to South Korean markets."

"From January 2027, foreign investors will be allowed to conduct unlimited KRW transactions with pre-registered foreign institutions. The reforms will remove reporting requirements for most transactions and eliminate the need for foreigners to open KRW accounts in South Korea."

"Taken together, these reforms should improve offshore access to the KRW and deepen foreign participation in South Korean financial markets."

"The main benefit of the reforms is likely a lower risk premium and improved foreign access to South Korean assets. Deeper offshore liquidity could also facilitate larger investment and repatriation flows without generating excessive FX volatility."

"However, greater internationalisation may increase the KRW’s sensitivity to shifts in global risk sentiment over time."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

BNY’s Geoff Yu argues that Prime Minister Andy Burnham’s removal of Value Added Tax (VAT) on household electricity is a test of the United Kingdom’s (UK) fiscal protection strategy. While the measure offers modest relief and trims headline inflation, gilt and British Pound (GBP) weakness highlight investor concerns that unfunded easing could signal a broader political shift, turning household support into a credibility challenge.

Energy tax cut raises fiscal questions

"The U.K. is testing fiscal protection. Prime Minister Andy Burnham’s removal of VAT on household electricity bills offers direct relief to consumers and a modest cushion to real incomes. There’s also talk of business-rates relief."

"But gilt and sterling weakness underline the trade-off. Household protection can quickly become a credibility problem if investors question whether fiscal easing is fully funded or part of a broader political shift. The measure itself is manageable; the signal is what markets are watching."

"New U.K. Prime Minister Burnham announced a cut in the household energy bills tax, scrapping the 5% VAT charge from October 1 as the first step in his cost-of-living package. The government said the move will save families about £45 a year, cost £850mn in 2026–27 and be financed by abandoning the previous administration’s digital ID plan."

"Officials said the measure could trim headline inflation by 0.1 percentage point. Burnham said the policy is meant to give households breathing space, while critics questioned the funding plan and noted that broader energy price pressures remain elevated."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• WTI rises more than 2.5% on Tuesday, trading around $84.40.
• Investors remain focused on the risk of Oil supply disruptions stemming from the US-Iran conflict.
• Markets now await the weekly American Petroleum Institute Crude Oil inventory report for fresh catalysts.

West Texas Intermediate (WTI) trades around $84.40 at the time of writing on Tuesday, up 2.6% on the day, as concerns over global Oil supplies continue to support prices despite hopes for a diplomatic de-escalation in the Middle East.

The market remains driven by geopolitical developments after US airstrikes on Iran entered their tenth consecutive day. United States (US) President Donald Trump reiterated on Monday that Iran would "pay" for the deaths of three US service members, while the Iranian Islamic Revolutionary Guards Corps (IRGC) claimed to have struck several US military installations in Bahrain and Kuwait.

Tensions escalated further after the Iran-backed Ansar Allah rebels in Yemen announced a maritime embargo against Saudi Arabia in the Red Sea. The move has reinforced concerns over regional energy flows, adding to the persistent risks surrounding shipping through the Strait of Hormuz, a strategic chokepoint for global Oil exports.

Meanwhile, markets continue to assess the prospects for a potential diplomatic resolution between Washington and Tehran. Although easing tensions could limit further gains in Oil prices, immediate concerns over global supply disruptions remain the dominant driver of the market.

Investors will now turn their attention to the weekly American Petroleum Institute (API) Crude Oil inventory report due later on Tuesday.

Middle East tensions keep Oil’s geopolitical premium in focus

BNY Mellon analysts highlight that “a tenth day of strikes keeps the shipping-risk channel alive and leaves Oil trading with a geopolitical premium,” with Gold edging higher alongside crude. They stress that “higher Oil is not just a risk-off signal; it’s also an inflation shock,” which helps explain why “Treasurys haven’t behaved like a simple safe haven” despite the escalation.

According to BNY Mellon, “the US Central Command said it hit command centers, launch sites and air defenses in Iran, while Iran struck US military sites in Kuwait and Jordan,” and that “the UK navy reports also pointed to attacks on vessels near the Strait of Hormuz.” Against this backdrop, BNY Mellon reports that “the standoff has lifted Brent crude to $88.45 a barrel and pushed US gasoline above $4 per gallon,” warning that “disruptions to Hormuz shipping could further tighten global Oil supplies and raise geopolitical risk.”

Deutsche Bank observes that “the headlines weren’t all positive yesterday,” noting that Oil prices “pared back some of their decline after [Ansar Allah] said they’d impose a maritime blockade on Saudi Arabia, which risks adding to the oil supply disruption.” On the Middle East conflict, they see “some hope” after “a spokesman for Iran’s foreign ministry said that ‘ideas from some mediators have been conveyed’ to Iran,” but add that “escalating rhetoric from [Ansar Allah] in Yemen as well as from President Trump meant Brent Crude still closed 1.27% higher at $89.22/bbl.”

Strategists at OCBC point out that “shipping through the Strait of Hormuz has already slowed significantly,” and that Oil prices “rose further after reports that Yemen's Iran-backed [Ansar Allah] plans to restrict Saudi-linked maritime traffic in the Red Sea.” They caution that “such a move would threaten one of the few alternative routes capable of offsetting disruptions in Hormuz, potentially tightening Middle East oil supplies.” OCBC adds that “a larger escalation could revive fears of a prolonged supply shock and drive Oil prices back above $100/bbl,” reminding clients that “for perspective, Brent crude reached $126/bbl in late April, around 40% above current levels.”

MUFG analysts note that “the key themes across markets were an escalation of tensions between US and Iran and this time potentially involving the [Ansar Allah] in Yemen, coupled with concerns around the sustainability of the AI boom.” They highlight that “in particular, the [Ansar Allah] said they will impose a maritime blockade on Saudi Arabia in response to what they say is Saudi Arabia’s siege of the Yemeni capital,” which “led to the Saudi Arabia led military coalition in Yemen to begin implementing operational measures to protect ships in the Bab el-Mandeb Strait at the southern end of the Red Sea.”

MUFG also flags that “a wholesale disruption of the Strait may also be an alternative option, and this may lead some tanker and cargo traffic to take a longer route through the Suez Canal and the Cape of Good Hope which could ultimately lead to higher container freight rates and transport costs.” However, they temper the risk assessment by arguing that “in practice, we think even if there were disruptions it is unlikely to be sustained given the lack of capability right now by [Ansar Allah] to do so and also differentiate which are Saudi linked ships or not.”

• Trump weighs ceasefire or broader Iran war, boosting safe-haven demand.
• US yields rise as September Fed hike odds stay elevated.
• Healey appointment leaves markets cautious on UK fiscal stance.

The Pound Sterling loses some ground against the US Dollar, down by 0.48%, as risk appetite in the foreign exchange markets deteriorates, with the Greenback reclaiming key technical levels in the US Dollar Index (DXY) amid the escalation of the US-Iran conflict. The GBP/USD trades at 1.3371, after reaching a daily high of 1.3455.

GBP/USD falls as Middle East escalation lifts yields and Dollar

The DXY, which tracks the buck’s value against a basket of six currencies, advances 0.14% at 101.14, as tensions in the Middle East rise. Newswires reported that Washington is demanding a longer ceasefire and partial navigation through the Strait of Hormuz, while Iran proposed a 10-day ceasefire.

A report by Axios revealed that Trump is evaluating whether to promote a ceasefire of 10-days or launch a full-scale war on Iran. In the meantime, a US official said that if Trump advocates expanding the war, the strikes will include Tehran and nuclear sites, according to Al Arabiya.

Aside from this, US data showed the ADP Employment Change 4-week average at 16.5K, below the prior revised 19.25K, amid a light economic docket during the week, with Initial Jobless Claims the most important release ahead of the Federal Reserve’s (Fed) July 29 monetary policy decision.

US Treasury yields are rising, with the 10-year T-note up three basis points at 4.624%, a tailwind for the Greenback. This signals that investors expect a Fed rate hike toward the end of the year.

Data from Prime Terminal suggests a 78% chance that the Fed will keep rates unchanged at next week’s meeting, but for September the odds for a hike are near 68%.

In the UK, John Healey was appointed as Britain's Chancellor of the Exchequer, succeeding Rachel Reeves. The new PM, Andy Burnham, named Healey after the close of the UK markets, yet the Pound has eased amid some uncertainty about the UK’s fiscal position.

Before taking office, Andy Burnham reiterated that he would stick to the fiscal rules, though he said he would use any budgetary flexibility within those rules to implement his program.

Earlier, strong UK jobs data eased pressure on the Bank of England, which could resume its easing cycle next year. Investor eyes are on Wednesday's inflation data release.

GBP/USD Price Forecast: Technical outlook

In the daily chart, GBP/USD trades at 1.3371, retaining a bearish near-term bias as the pair holds just beneath the cluster of Simple Moving Averages (SMA) around 1.3374. Price also remains capped below the downward resistance trendline break level at 1.3478, while the Relative Strength Index (RSI) at 49 leans slightly negative, hinting at a lack of strong buying pressure despite the recent stabilization above the mid-1.3300s.

On the topside, immediate resistance is located at the grouped 50/100/200-period SMAs near 1.3374, followed by the descending trend-line barrier at 1.3478, with the former support-line break at 1.3511 now acting as a higher cap. With no clear structural support levels defined in the current dataset below spot, any decisive break under 1.3371 would likely expose the pair to further downside exploration until fresh demand emerges on the chart.

(The technical analysis of this story was written with the help of an AI tool. Know more.)