- Loonie traders ignoring tariff threats.
- Canadians hoping to avoid the worst of Trumps tariffs.
- USD dollar opens with modest losses.
USDCAD: open 1.4253, overnight range 1.4247-1.4299, close 1.4280, WTI 69.46, Gold 3018.22
The Canadian dollar inched higher overnight as traders appear to ignore the looming tariff threats. The ongoing Canadian federal election is a non-event for traders, so far, but that could change.
The Canadian dollar is benefitting from broad-based US dollar losses stemming from yesterday’s weak US Consumer Sentiment report. The Conference board noted that “the Expectations index, based on consumers’ short-term outlook for income, business, and labor market conditions—dropped 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.
WTI oil prices rose from 69.07 to 69.70 overnight, a three-week peak. The gains were driven by the API weekly crude inventory data showing US crude inventories fell by 4.6 million barrels in the previous week. In addition, fears that lower supply from new sanctions on Iran and Venezuela underpinned prices.
Asian equities posted modest gains, with Australia’s ASX 200 up 0.71% after inflation data surprised to the downside. Japan’s Topix added 0.55%, while the Hang Seng climbed 0.60%. European stocks are softer, led lower by France’s CAC 40 slipping 0.71%, while the FTSE 100 held steady. S&P 500 futures dipped 0.16%, and gold was treading water.
EURUSD traded in a 1.0778–1.0803 band as yesterday’s lift from upbeat German IFO data fizzled out. Traders are turning cautious ahead of the April 2 tit-for-tat tariff deadline. Remarks from ECB’s Francois Villeroy added to the downside pressure after he floated the possibility of rates dropping to 2.0% by summer. Resistance looms near 1.0950.
GBPUSD ranged between 1.2887 and 1.2950 after softer-than-expected inflation data for February. Headline CPI rose 2.8% y/y versus the forecast of 2.9%, while core CPI dipped to 3.5%. Traders are in wait-and-see mode ahead of the UK’s Spring Budget statement due later today.
USDJPY traded in a 149.84–150.62, range, initially climbing in Asia before easing back to 150.10 in New York despite dovish signals from policymakers. BoJ board member Junko Koeda acknowledged that rates remain excessively low and inflation is inching toward target.
Meanwhile, LDP official Satsuki Katayama threw cold water on the rally, suggesting fair value for USDJPY lies between 120.00 and 130.00.
AUDUSD tested support at 0.6279 before rebounding to 0.6330. The currency initially slipped on a softer February inflation print of 2.4% y/y, below expectations and the prior month’s reading then rallied on broad US dollar weakness.
Today’s US data includes Durable Goods Orders for February. There are no Canadian reports.
