Canada Reverses Digital Tax to Save U.S. Trade Talks; Loonie Recovers Modestly
| Action Insight Daily 6-30-25 |
Canada Reverses Digital Tax to Save U.S. Trade Talks; Loonie Recovers Modestly |
The forex market opened the week with low volatility and mixed Asian equities, but politically driven developments are keeping some G10 currencies in motion. Dollar is the weakest performer so far, with the Canadian Dollar also under pressure despite rebounding from weekend lows. Yen leads amid safe-haven inflows, while Kiwi and Aussie post modest gains. Ottawa moved to de-escalate tensions with Washington by announcing a reversal of its digital services tax, originally set to take effect this week. The retroactive levy on American tech firms had prompted a sharp rebuke from US President Donald Trump, who vowed to halt all trade discussions with Canada. Reversing the tax was described by Canadian leadership as a strategic step to preserve the July 21 negotiation timeline and prevent retaliatory tariffs. Canadian Prime Minister Mark Carney and Finance Minister Champagne framed the decision as a way to unlock progress on a new economic and security partnership. Markets welcomed the move, and the Loonie erased some of its losses, though sentiment remains fragile given the broader uncertainty heading into July’s tariff deadlines. Meanwhile, the UK confirmed its partial trade agreement with the US has now come into force. British car exports will now face a reduced 10% tariff quota, and duties on aircraft parts have been removed. While the deal marks progress, the issue of steel and aluminum tariffs remains unresolved. UK officials reiterated their intent to push for 0% tariffs on core steel products under the agreed framework. ..... |
USD/CAD Daily Outlook Daily Pivots: (S1) 1.3619; (P) 1.3689; (R1) 1.3750; More... USD/CAD dips mildly today but stays in range of 1.3616/3797. Intraday bias remains neutral at this point. On the upside, break of 1.3797 will resume the rebound from 1.3538 short term bottom to 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Nevertheless, below 1.3616 will bring retest of 1.3538 low. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
|---|
| 23:50 | JPY | Industrial Production M/M May P | 0.50% | 3.40% | -1.10% | | 01:00 | AUD | TD-MI Inflation Gauge M/M Jun | 0.10% | -0.40% | | 01:00 | NZD | ANZ Business Confidence Jun | 46.3 | 36.6 | | 01:30 | AUD | Private Sector Credit M/M May | 0.50% | 0.70% | 0.70% | | 01:30 | CNY | NBS Manufacturing PMI Jun | 49.7 | 49.7 | 49.5 | | 01:30 | CNY | NBS Non-Manufacturing PMI Jun | 50.5 | 50.3 | 50.3 | | 05:00 | JPY | Housing Starts Y/Y May | -34.40% | -14.80% | -26.60% | | 06:00 | EUR | Germany Import Price Index M/M May | -0.70% | -0.30% | -1.70% | | 06:00 | EUR | Germany Retail Sales M/M May | -1.60% | 0.50% | -1.10% | | 06:00 | GBP | GDP Q/Q Q1 | 0.70% | 0.70% | 0.70% | | 06:00 | GBP | Current Account (GBP) Q1 | -23.5B | -19.7B | -21.0B | | 07:00 | CHF | KOF Economic Barometer Jun | 99.3 | 98.5 | | 08:00 | EUR | Eurozone M3 Money Supply Y/Y May | 4.00% | 3.90% | | 08:30 | GBP | M4 Money Supply M/M May | 0.20% | 0% | | 08:30 | GBP | Mortgage Approvals May | 61K | 60K | | 12:00 | EUR | Germany CPI M/M Jun P | 0.20% | 0.10% | | 12:00 | EUR | Germany CPI Y/Y Jun P | 2.10% | | 13:45 | USD | Chicago PMI Jun | 42.7 | 40.5 |
|
|
|
