February 27, 2025
- Bird flu boosts US egg prices-Trump/RFK Jr make scrap vaccine plans
- Impact of Tariff threats beginning to diminish
- USD opens rangebound and mixed.
FX at a Glance
USDCAD: open 1.4338, overnight range 1.4322-1.4364, close 1.4339
President Trump says he will impose 25% tariffs on Canada beginning March 4 and an additional 25% tariff on steel and aluminum on March 12. Then, at a Cabinet meeting yesterday, he suggested April 2 as the start date. The tariff tale has gotten old. A barrage of contradictory statements makes it difficult for governments and central banks to develop plans to manage the risks, while traders are basically ignoring him.
If USDCAD traders were convinced that tariffs were a done deal and not a negotiating tactic, USDCAD would be at 1.4700.
It is a big day for U.S. data, and the results will determine USDCAD direction, at least for today. Weekly jobless claims are expected to rise by 2,000 to 221,000, January Durable Goods Orders are expected to increase by 2.0% compared to a 2.2% decline previously, and U.S. Q4 GDP is expected to have risen by 2.2%.
WTI oil prices climbed from 68.48 yesterday to 69.27 today, supported by a 2.33 million-barrel drawdown in U.S. crude inventories last week, compared to forecasts expecting a 2.3 million-barrel increase. The rally got additional legs after Trump terminated Chevron’s license to operate in Venezuela, effective March 1. Trump claimed that the “Maduro regime” failed to meet electoral conditions.
There is also no shortage of Fed officials on the speaking circuit. Vice Chair Michael Barr, Governor Michelle Bowman, Richmond Fed President Thomas Barkin, and Cleveland Fed President Beth Hammack are all on tap.
USDCAD Technicals.
The USDCAD technicals are unchanged, with the uptrend line on the hourly chart intact while prices are above 1.4320. A break above 1.4370 would extend gains to 1.4420 while a move below 1.4320 targets the 1.4280-90 area,
The longer term technicals are unchanged from yesterday. The Fibonacci study suggests the decisive move above 1.4270 will lead to a test of 1.4795 while the MACD (moving average convergence divergence) has crossed higher, supporting the argument for a USDCAD rally.
For today, USDCAD support is 1.4320 and 1.4290. Resistance is at 1.4370 and 1.4420
Today’s Range: 1.4280-1.4380
Chart: USDCAD daily
Bird Flu is No Big Deal Unless You Are a Bird
The highly pathogenic avian influenza (HPAI) is not just for the birds; it has infected about 70 Americans and doubled the price of eggs in some markets, including L.A. and Chicago. Fortunately, Moderna had a $550 million contract to develop a bird flu vaccine. But that may change. Robert F. Kennedy Jr., the Secretary of Health, former druggie, and a current vaccine denier, decided he needed to review Moderna’s contract. However, in the big picture for the U.S. economy, agriculture contributes about 5% to U.S. GDP, and poultry is a fraction of that.
Give Me Your Minerals
Volodymyr Zelensky is reportedly meeting with Trump today to sign a mineral rights deal worth $500 billion in return for… something. Zelensky wants a security guarantee, while Trump says Ukraine’s security is a European problem. Another wrinkle to the tale is that 50% of the minerals that Trump wants are in territory held by Russia. So, is Trump doing a mineral rights deal with Volodymyr or Putin?
NVIDIA Results Fail to Ignite Another Global Equity Rally
NVDA: NASDAQ posted better-than-expected Q4 earnings, with revenue rising 78% in the quarter, while earnings per share were 0.89 vs. 0.84 expected. Asian traders were happy, and the results helped Japan’s Topix close with a 0.73% gain and Australia’s ASX 200 finish up 0.33%. European bourses are dealing with angst around tariff threats. The German DAX is down 0.98%, and the French CAC 40 index has lost 0.42%. S&P 500 futures traders are perky, and the index has gained 0.59%. The U.S. 10-year Treasury yield is steady at 4.31%.
EURUSD
NY Open: 1.0481, Overnight Range: 1.0459-1.0493
EURUSD dropped then popped in a relatively narrow range due to conflicting signals from Eurozone data and the prospect of U.S. tariffs. The EU faces 25% tariffs beginning March 4, or April 2, or maybe never. EURUSD saw a little support after Eurozone economic sentiment rose to 96.3 from 95.3 in January. However, the ECB is expected to cut rates again, which helped limit gains. The intraday EURUSD technicals are bullish above 1.0440 and looking for a break above 1.0530 to extend gains to 1.0620.
GBPUSD
NY Open: 1.2679, Overnight Range: 1.2650-1.2685
GBPUSD bounced around with a slight bullish bias in quiet trading. The UK data calendar was empty, and traders are awaiting details from Prime Minister Keir Starmer’s meeting with Trump today, where he is expected to discuss the U.S. providing a security backstop for Ukraine. The intraday GBPUSD technicals suggest a bullish bias while prices are above 1.2650.
USDJPY
NY Open: 149.84, Overnight Range: 148.75-149.97
USDJPY rejected a move below 148.50 for the third day in a row and is now trading close to its overnight peak. USDJPY is seeing some pressure from the recent drop in the U.S. 10-year Treasury yield, but traders appear to be more focused on Japanese economic data and what it means for BoJ rates. Tokyo CPI, Industrial Production, and Retail Sales are due tomorrow. Higher inflation would support arguments for the BoJ to raise rates sooner rather than later.
AUDUSD
NY Open: 0.6299, Overnight Range: 0.6285-0.6315
AUDUSD traded negatively due to elevated risk aversion sentiment caused by confusion around Trump’s tariff plans. Prices were also depressed after Australian Capital Expenditures fell 0.2% in Q4, compared to the forecast for a 0.8% rise.
NZDUSD
NY Open: 0.5683, Overnight Range: 0.5674-0.5702
NZDUSD dropped along with the Australian dollar due to U.S. tariff angst despite an improvement in economic sentiment. The ANZ Business Confidence Index was 58.4 in February, compared to 54.4 in January. ANZ’s Chief Economist, Sharon Zoller, said, “The economy remains on the path to recovery as interest rates fall and our commodity export prices outperform expectations.”
USDMXN
NY Open: 20.3971, Overnight Range: 20.3656-20.4466
USDMXN traded sideways but with a modest negative bias after indications that Trump’s 25% tariff could be postponed. USDMXN sentiment turned mildly negative after Deputy Foreign Minister Luis Gutierrez said that Mexico and the U.S. were working toward an agreement before the tariff deadline. Mexico’s jobless rate was 2.7% in January, as expected but above the 2.4% seen in December.
FX high, low, open (as of 6:00 am ET)
China Snapshot
PBoC fix: 7.1740 vs exp. 7.2561 (prev. 7.1732)
Shanghai Shenzhen CSI 300 rose 0.21% to 3968.12.
US Commerce Secretary Howard Lutnick suggested that he would ban Chinese vehicles from entering the US.
Sources: Yahoo Finance, Oanda, Investing.com,
