Asia Summary and Highlights 30 Jun

Asia Session

After Trump cancelled trade talks with Canada last week, Canada has made the first move to rescind Digital Services Tax to advance broader trade negotiations with the US. It is a positive sign and see Trump resuming talks with Canada, aiming for a deal within the next three weeks. USD/CAD opened a few pips higher but the gap was quickly closed and see the pair currently trading 0.03% lower at 1.3677.

The USD/JPY opened lower at 144.29 from Friday's close at 144.62 as Trump's weekend comment continue to pressure USD. He talked about his "big, beautiful bill", being a cost cutting Republican and unfair auto trade with Japan. USD/JY is currently trading 0.47% lower at 143.93 after closing the gap in early Asia. Risk sentiment is broadly positive while USD lower. AUD/USD is up 0.17%, NZD/USD is up 0.27% while EUR/USD is trading 0.12% higher and GBP/USD 0.09% higher.

North American session

The USD was generally marginally stronger, with the biggest move coming on USD/CAD, which broke above 1.37 after Trump broke off trade negotiations with Canada citing Canada’s Digital Service Tax, and stated Canada would receive its tariff level in the next seven days. Otherwise, USD gains were modest. USD/JPY gains stalled ahead of 145. EUR/USD found support below 1.17 after an early move above 1.1750. GBP/USD saw a brief move below 1.37 while AUD/USD fell to .6525 from .6550. EUR/GBP/ was firmer peaking above .8550 while EUR/CHF and EUR/SEK largely erased European losses. 

May US core PCE prices were marginally stronger than expected but this had little impact with personal income and personal spending both weak at -0.4% and -0.1% respectively. April Canadian GDP fell by 0.1% with a similar decline projected for May but this was not a major factor in CAD slippage.