USD / CAD - Canadian dollar soaring
- Global equity indexes plunge in wake of Trump tariffs.
- US ISM services and weekly jobless claims data overshadowed by tariff news.
- US dollar plunges across the board
USDCAD: open 1.4125, overnight range 1.4113-1.4319, close 1.4236, WTI 68.38, Gold 3114.61
The Canadian dollar soared after Trump levied a minimum of 10% tariff on 60 countries. Canada was not on the list. Trump is honouring (for the most part) the US-Mexico-Canada Agreement on Trade that he signed on January 29, 2020.
Canada still faces tariffs as the existing levies on steel, aluminium, lumber and potash remain in place and it is those tariffs that Prime Minister Mark Carney is promising to retaliate against. If he does, he will face the ire of Trump, and the soaring Canadian dollar will return to earth.
WTI oil prices dropped from 70.38 to 67.44 overnight and are at the bottom of that range in NY trading. Trump hit China with an additional 34% in new tariffs on top of the existing 20% tariffs, which is expected to put a dent in China’s economic growth and by default oil demand. The sell-off was exacerbated by the EIA report that US crude inventories rose by 6.16 million barrels last week.
EURUSD traded in a 1.0805–1.1146 range overnight and opened in New York at 1.1103. The single currency showed surprising resilience in the face of Trump’s newly announced 20% import tariff. Investors are waiting to see how the EU will coordinate its response while also navigating rising tensions tied to Putin’s renewed focus on Ukraine. Slightly better-than-expected German and Eurozone Services PMI data offered modest support to the euro.
GBPUSD moved within a 1.2974–1.3207 band overnight and began NY trading at 1.3177. Sterling surged after Trump revealed that UK goods would face a reduced 10% tariff, a far more lenient rate than what was imposed on the EU. Steady UK Services PMI results (52.5 versus a prior 53.2) added to the upside momentum.
USDJPY fell through a 146.26–149.31 overnight range, opening in New York at 146.32 and sitting near session lows. The pair came under pressure due to broad US dollar weakness, falling Treasury yields, and an uptick in demand for traditional safe havens like the yen.
AUDUSD climbed through a 0.6226–0.6360 range overnight and opened the North American session at 0.6354. The Aussie gained ground partly because Australia escaped with just a 10% tariff under Trump’s sweeping trade measures. However, the majority of the rally was fueled by a broad wave of US dollar selling.
US ISM Services and weekly jobless claims data are on tap.
