- Looming tariffs are weighing on the Loonie
- US ISM Manufacturing PMI expected to dip to 49.5 from 50.3.
- US dollar trading sideways but bid against commodity bloc.
USDCAD: open 1.4369, overnight range 1.4367-1.4404, close 1.4388, WTI 71.70, Gold 3132.33
The Canadian dollar is slowly sinking as Trump’s tariff day approaches.
CAD sentiment is bearish, as evidenced by the latest CBOE Commitment of Traders report but positions have been reduced. Open interest fell by 66.8K contracts which was the biggest weekly decline in months. Positioning is still bearish, but conviction is fading fast.
WTI oil consolidated recent gains in a 71.12-71.99 range after Trump’s recent actions against Venezuela and his threat to impose tariffs on all countries buying Russian oil boosted prices.
Asian stock markets moved higher, with Australia's ASX 200 climbing 1.04% and Japan's Topix inching up 0.11%. European bourses are also in the green, led by a 1.36% jump in the German Dax and a 0.99% rise in the French CAC 40. S&P 500 futures are treading water, and the 10-year US Treasury yield eased to 4.17% from 4.21%. Gold (XAUUSD) stayed firm, bouncing between 3120.18 and 3149.03 as safe-haven demand persisted.
Expectations for today's ISM Manufacturing PMI show a retreat to 49.5 from 50.3, while February's JOLTS report is forecast to show job openings down by 110,000 to 7.63 million.
EURUSD traded in a 1.0799–1.0831 band and remained choppy with a modest upside bias while holding above the 1.0790 area. Euro area inflation edged lower in March, with headline CPI at 2.2% versus 2.3% in February, and core CPI at 2.4% compared to the previous 2.6%. This softening lends support to expectations for an ECB rate cut on April 17, although tariff developments could disrupt those plans.
GBPUSD drifted in a 1.2902–1.2941 range, staying inside Monday’s band and hovering near the session low in early New York dealing. UK data was limited to the BRC Shop Price Index, which dropped 0.4% in March after falling 0.7% in February. Prime Minister Keir Starmer claimed UK-US trade talks are making strong progress and expressed hope for a deal to avert tariffs, though that hope may be misplaced given the transient nature of Trump’s trade commitments.
USDJPY traded relatively quietly in a149.51-150.14 band as it consolidated recent gains. Tariff concerns remained the main driver, overshadowing Japan's domestic data. The unemployment rate improved slightly to 2.4% in February from 2.5% the month before. The Tankan survey for large manufacturers slipped to 12 from January’s 14, with the decline attributed to tariff fears. Manufacturing PMI nudged up to 48.4 from 48.3.
AUDUSD moved within a 0.6232–0.6276 range and inched higher after the RBA left its policy rate unchanged at 4.10%. Governor Michele Bullock said the central bank was well-positioned to manage any economic fallout from tariff disruptions. February retail sales rose 0.2% month-over-month, slightly below the 0.3% forecast.
