- Canadian dollar shrugs off lates Trump tariff
- Fed Chair Powell testifies at 3:00 pm
- USD opens with modest gains after cautious overnight session.
USDCAD: open 1.4343, overnight range 1.4316-1.4345, close 1.4318, $73.18 Gold, $2903.43
The Canadian dollar traded sideways in an uneventful overnight session despite President Trump imposing tariffs on imports of Canadian steel and aluminum. It is a slap in the face to the Canadian government after Trump promised to delay previously announced tariffs until March 1.
Canada was not the only country singled out for tariffs. President Trump issued a proclamation declaring that America’s national security was being threatened due to Argentina, Australia, Brazil, EU countries, Japan, Mexico, South Korea, and the United Kingdom unfairly dumping steel and aluminum, which takes away American jobs. All of the above were hit with 25% levies on those imports.
Fed Chairman Jerome Powell is unlikely to rock the boat with his testimony to Congress today. He is expected to maintain his dovish rate outlook while avoiding commenting about Trump’s tariffs.
EURUSD drifted in a 1.0292-1.0326 band overnight and opened in New York at 1.0318. The pair remains under pressure following the confirmation of US tariffs on steel and aluminum imports from the EU. Broader euro weakness is also fueled by widening ECB-US interest rate differentials and a lack of significant Eurozone economic data.
GBPUSD bounced inside a 1.2332-1.2378 band before opening in New York at 1.2362. The pound slipped after former Bank of England MPC hawk Catherine Mann justified her recent shift toward a more dovish stance. She was the sole advocate for a 50 bp rate cut last week, explaining that such a move was necessary to send a clear signal to traders that interest rates are heading lower.
USDJPY climbed from 151.65 to 152.15 overnight and began the New York session at 152.13. The yen found some initial support in Asian markets amid safe-haven demand following the latest US tariff announcement. However, the dip was short-lived, and USDJPY rebounded to reclaim losses ahead of US market hours. Rising US Treasury yields, with the 10-year yield inching up from 4.50% to 4.52%, provided additional support for the pair.
AUDUSD traded quietly in a 0.6260-0.6288 range overnight. AUDUSD barely reacted to the latest tariff developments, partly because Prime Minister Anthony Albanese suggested that Australia will secure an exemption from the tariffs following discussions with Trump.
There are no top-tier US or Canadian economic reports today.
