- New Canadian softwood lumber tariffs begin today
- Markets shift focus to Fed rates
- US opens softer after Powell’s comments.
USDCAD open: 1.4039, overnight range 1.4028-1.4049, close, 1.4047, WTI 58.74, Gold 4194.99
The Canadian dollar traded sideways overnight as it consolidated recent losses due to ongoing trade and tariff issues.
President Trump imposed an additional 10% tariff on Canadian softwood lumber, raising the total duty to 35%. Stellantis announced plans to shift Jeep Compass production from Brampton to Illinois, suggesting that the 3,000 employees laid off since 2023 are unlikely to return.
WTI oil traded in a 58.38-58.90 band after the International Energy Agency projected an oil surplus of roughly 4.0 million barrels per day in 2026, compounding the negative impact of escalating U.S.–China trade tensions.
Yesterday, Fed Chair Jerome Powell took control of global markets that had been rattled since Friday. Escalating trade tensions between China and the U.S., political uncertainty in France and the U.S., and fears of a stock market bubble all faded when Powell hinted that rate cuts were back in play.
Asian equity markets extended the upbeat tone from the U.S. with broad gains. Japan’s Topix rose 1.58%, Australia’s ASX 200 climbed 1.03%, and Hong Kong’s Hang Seng advanced 1.84%.
As of 7:30 AM EDT, European indexes were mostly positive except for the UK FTSE 100, which slipped 0.47%. France’s CAC-40 surged 2.36%, while Germany’s DAX added 0.10%. S&P 500 futures are up 0.59%, the U.S. Dollar Index (DXY) was 98.85, the 10-year Treasury yield stood at 4.011%.
EURUSD traded in a 1.1602-1.1646 range, snapping a 10-day losing streak as political developments in France boosted confidence. Prime Minister Sebastien Lecornu agreed to delay pension reform until after the 2027 election, securing Socialist Party backing and improving his odds of surviving a no-confidence vote expected Thursday. Eurozone Industrial Production fell 1.2% m/m in August, beating forecasts of -1.6% but still weaker than July’s 0.3% increase.
GBPUSD drifted in a 1.3317-1.3373 band, rising as traders looked past soft UK employment data and focused on expectations of lower Fed rates. An IMF report projecting the UK to have the slowest living standard improvement in the G7 failed to move the market.
USDJPY was firmer in a 150.90-151.88 range, recovering some of the previous day’s losses amid general U.S. dollar weakness. Gains were limited by growing conviction that U.S. rates are heading lower, keeping the pair capped below 152.00.
AUDUSD rose in a 0.6481-0.6523 range, lifted by improved risk sentiment following Powell’s dovish remarks. Concerns about China/U.S. trade tensions faded into the background as traders awaited Australia’s employment data due tomorrow for the next catalyst.
Canada’s Manufacturing and Wholesale Sales reports are on tap.
