March 7, 2025
- Trump delays tariffs-equities continue to sink
- Canada only adds 1,100 jobs: US NFP rises151,000
- USD extends losses except against Antipodean currencies.
FX at a Glance
USDCAD: open 1.4315, overnight range 1.4280-1.4352, close 1.4296
Sanity prevailed (at least temporarily) in Washington yesterday. President Trump cancelled the 25% tariff on Canadian imports and reverted to the USMCA trade deal, but only until April. Canadian officials were not impressed. Trudeau plans to leave the 25% tariffs on $30 billion of US goods in place but will not implement the tariffs on another $125 billion yet. Ontario Premier Doug Ford is really annoyed at Trump constantly changing his demands and levied a 25% tariff on exports of electricity, mainly to the US. Michigan, New York State and Minnesota.
USDCAD drifted higher in the wake of the tame US NFP report and the rather weak Canadian employment results. Canada only added 1,100 jobs but the unemployment rate held fast at 6.1%.
Once again, the 10:00 am option expiry window sets the stage for volatility. $1.2 billion of strikes in the 1.4290-1.4300 area are rolling off with another $870 million of 1.4315-25 strikes expiring. In addition, there are about $3.8 billion of 1.4350-60 strikes maturing.
USDCAD Technicals.
The intraday USDCAD technicals are bearish while trading below 1.4350 and looking for a break below 1.4290 to extend losses to 1.4250. A break above 1.4350 suggests further 1.4290-1.4450 consolidation.
Longer term, the USDCAD uptrend line remains intact, but prices need to break above 1.4450 to end the consolidation phase and spark another rally toward 1.4700.
For today, USDCAD support is 1.4290 and 1.4250. Resistance is at 1.4350 and 1.4410
Today’s Range: 1.4290-1.4390
Chart: USDCAD daily
Remembering Mr Miyagi
President Trump appears to have watched a rerun of Karate Kid, but perhaps the recent gunshot to his ear made him mishear Mr. Miyagi’s instructions to Daniel. That would explain his almost daily tariff flip-flop. The 25% tariffs that were imposed on Mexico and Canada effective March 4 have been canceled but will come into effect in April. Equity traders reacted to Trump’s flip-flopping policies by selling equities again. The S&P 500 closed down 1.78% and has lost 3.63% in the first four trading days of March.
Following the Leader
Equity traders in Asia followed Wall Street’s lead, and the major equity indices closed with steep losses, led by a 1.81% drop in Australia’s ASX 200 and a 1.56% decline in Japan’s Topix. European bourses are deep in the red, with the German DAX down 1.42% and the French CAC 40 shedding 0.93%. S&P 500 futures are bucking the trend and are up 0.31% ahead of the U.S. employment numbers.
Psst – Have You Heard the Number? —its No Big Deal
U.S. nonfarm payrolls rose 151,000 (forecast 160,000) while the January data was revised down to 125,000 from 143,000 last month, while the unemployment rate ticked up to 4.1% from 4.0% . The FX market was not impressed, and the US dollar fell against GBP, JPY and EUR.
EURUSD
NY Open: 1.0856, Overnight Range: 1.0781-1.0871
The increased risk that the U.S. quits NATO, combined with Trump’s affinity for Putin, was a bucket of ice water to sleeping EU and German politicians. They not only awoke with a start but with a plan—massive military stimulus spending. EURUSD got an added boost after Q4 GDP rose 1.2% y/y compared to the forecast for a 0.9% rise. The ECB’s 25 bp rate cut to 2.5% yesterday did not deter U.S. dollar sellers, as it was fully priced in. President Lagarde said that rates were “meaningfully less restrictive,” which suggests policymakers are in no hurry to cut rates any time soon. The intraday EURUSD technicals are bullish above 1.0770 and looking to test 1.0960.
GBPUSD
NY Open: 1.2919, Overnight Range: 1.2876-1.2945
GBPUSD extended yesterday’s gains, and traders ignored housing price data, with prices rising due to broad-based U.S. dollar weakness. Prices are underpinned because many analysts do not expect that the Bank of England will lower rates slower than the Fed.
USDJPY
NY Open: 147.57, Overnight Range: 147.21-148.17
USDJPY traded negatively due to Trump’s tariff plans and rising geopolitical tensions thanks to Trump snuggling up to Putin, which fueled safe-haven demand for yen. In addition, the yield on 10-year JGBs surged to 1.524%, supporting the case for a BoJ rate cut. President Trump is musing about the U.S. relationship with Japan and complaining that America has to protect Japan, but Japan doesn’t have to protect America. Japanese authorities say Trump’s claim is untrue. (What a surprise.)
AUDUSD
NY Open: 0.6308, Overnight Range: 0.6297-0.6336
AUDUSD traded uneventfully due to competing influences. Support from widespread U.S. dollar selling was offset by China’s somewhat disappointing trade data, which showed exports declined.
NZDUSD
NY Open: 0.5723, Overnight Range: 0.5706-0.5742
NZDUSD is little changed from where it started yesterday’s NY session. Traders were sidelined due to Trump’s tariff flip-flop and are awaiting U.S. employment data.
USDMXN
NY Open: 20.2483, Overnight Range: 20.2288-20.3051
USDMXN is back trading where it started in 2025 after the President canceled the 25% tariffs on Mexican imports levied on March 4 and said all trade reverts to terms under the U.S.-Mexico-Canada Agreement on trade—but only until April. Mexican inflation rose 3.77% y/y compared to 3.59% previously. February inflation rose .28% as expected.
FX high, low, open (as of 6:00 am ET)
China Snapshot
PBoC fix: 7.1705 vs exp. 7.2406 (prev. 7.1692)
Shanghai Shenzhen CSI 300 rose 1.38% to 3956.24
Chinese February Trade surplus $170.52 billion (forecast $142.35B, January $104.84B). Exports rose 2.3%. Imports fell 8.4%
Sources: Yahoo Finance, Oanda, Investing.com,
