- Improved risk sentiment on Tariff walk-back lifts Loonie.
- US consumers may not be very confident.
- USD trading defensively but inside well-defined ranges.
USDCAD: open 1.4319, overnight range 1.4285-1.4333 close 1.4319, WTI 69.58, Gold 3023.63
The Canadian dollar is trading higher after improved sentiment stemming from Trump’s latest tariff U-turn. He hinted that auto tariffs might be delayed, though he warned they’re still on the table.
The moves appear more like noise than trend ahead of Thursday’s GDP report and Friday’s PCE price index. Meanwhile, the Canada–US 10-year yield spread widened to -129.9 from -119.3 last week, implying limited scope for further USDCAD weakness.
WTI oil prices are hovering near the top of their 68.89–69.63 range after Trump announced a 25% tariff on all trade with nations purchasing Venezuelan crude.
There are no Canadian data releases of note today.
The Conference Board’s consumer confidence index is due at 10:00 am, with forecasts pointing to a dip to 94.0 from 98.3, driven by large-scale public sector layoffs and inflation risks tied to Trump’s tariff strategy. Other data on deck includes January home prices, new home sales, and the Richmond Fed manufacturing survey.
EURUSD traded in a 1.0777–1.0820 range and climbed above its earlier peak after upbeat German IFO results. Business Climate, Current Conditions, and Expectations all improved from February, boosting confidence in a potential recovery. Optimism is also underpinned by the €500 billion stimulus recently introduced by Berlin.
GBPUSD traded in a 1.2902–1.2944 band and nudged higher in NY dealings after a quiet overnight session. Markets are in a holding pattern ahead of Wednesday’s mini budget. Traders are waiting to see how the Chancellor plans to tackle surging debt and tepid growth. The Office for Budget Responsibility (OBR) is expected to slash its 2025 UK growth outlook from 2.0% to 1.0%, which may put further pressure on sterling.
USDJPY traded in a 150.41–150.94 range and is consolidating gains near the low end of that band. Support comes from the US 10-year Treasury yield, which rose from 4.28% yesterday to 4.36% today.
AUDUSD traded in a 0.6279–0.6300 range and began the NY session near the top of that band before nudging up to 0.6305. The pair remains underpinned by stronger-than-expected PMI readings and Trump’s shift from blanket tariffs to a more selective approach, expected to be announced April 2. Traders now await February inflation data from Australia, forecast to hold steady at 2.5% y/y.
