April 16, 2025
USDCAD: open 1.3912, overnight range 1.3904-1.3966, close 1.3959.
USDCAD caught a bit of a bid yesterday after weaker than expected inflation data supported the argument for the Bank of Canada to cut rates by 25 bps, to 2.5%, today. However, the report that Honda was contemplating moving 90% of its Canadian auto production to the US muddied the waters. One argument is that the BoC would leave rates unchanged until it got more clarity on tariffs.
Nevertheless, it was the President of Honda Canada denying that production would be moved, not anyone from Honda’s Executive team in Japan. Being President of Honda Canada is a pretty good gig, but he is not part of the senior management so arguably, he is not in the loop.
Fed Chair Jerome Powell will discuss the US economy this afternoon at a speech in Chicago. Investors will be looking to see if Powell supports Gover Christopher Wallers dovish comments from Monday.
US Retail Sales rose 1.4% m/m compared to estimates for a 1.3% gain in part because consumers rushed to buy goods to beat the tariffs.
USDCAD Technicals
The intraday USDCAD technicals are modestly bullish after breaching resistance at 1.3951, the 61.8% Fibonacci retracement level of the September-February range. However, the subsequent retracement suggests momentum is fading and a move below 1.3910 would target 1.3820.
The longer term technicals are bearish while prices are below the 200-day moving average at 1.4000. a break above 1.4110 is needed to negate the downside pressure.
For today, USDCAD support is at 1.3870 and 1.3810. Resistance is at 1.3960 and 1.4020
Today’s Range: 1.3870-1.3970
Chart: USDCAD daily
FX at a Glance
Show Some Respect
President Trump is hanging by the phone hoping that China President Xi Jinping will call him to open trade negotiations. China wants the US to show them a little respect and put an end to the disparaging remarks like referring to the nation of 1.4 billion people as peasants, as the hillbilly VP did. China is interested in negotiating—they appointed a new trade negotiator, Li Chenggang, but wants the US to outline a more consistent trade position and also address Chinese concerns around American sanctions.
Big Banks Profit in Global Equity Market Turmoil
Equity market turmoil may be bad for investors, but the big Wall Street banks’ trading desks are printing money. Goldman Sachs, JPMorgan, and Morgan Stanley all reported surging trading revenues, generating a combined $12 billion in earnings just from the equity business, according to the WSJ.
Wall Street closed in the red yesterday and Asian equity indexes did the same. Japan’s Topix fell 0.61%, Hong Kong’s Hang Seng dropped 1.91%, and the ASX 200 was flat.
European bourses are in negative territory but far better than they were earlier. The German DAX is down 0.26% while the French CAC 40 is off 0.39%. S&P 500 futures have gotten weaker since the NY open and they are down 0.84%. The 10-year Treasury yield is 4.34% while gold (XAUUSD) made a fresh all-time high at 3318.00.
EURUSD
NY Open: 1.1361, Overnight Range: 1.1281-1.1393
EURUSD recouped yesterday’s losses and is trading with a bit of a bid, looking for a break above 1.1390 to extend gains to 1.1470. The single currency is rising despite reports of disappointing EU/US trade talks which point to the 20% US tariff on EU goods remaining in place. Eurozone inflation data for March was as expected.
GBPUSD
NY Open: 1.3269, Overnight Range: 1.3222-1.3293
GBPUSD continues to grind higher and is targeting a move above 1.3310 to extend gains to the 2024 peak of 1.3333. The rally got a boost from falling inflation and retail price data. Headline CPI rose 2.6% compared to 2.8% y/y in February.
USDJPY
NY Open: 142.83, Overnight Range: 142.05–143.28
USDJPY traded sideways but with a negative bias due to renewed safe-haven demand for yen because of what appears to be escalating US and China trade tensions. Trump was seriously annoyed after China halted deliveries of Boeing jets. Reuters reported that the BoJ will cut its 2025 GDP forecast at its May 1 meeting while leaving rates unchanged.
AUDUSD
NY Open: 0.6371, Overnight Range: 0.6323-0.6378
AUDUSD is little changed from yesterday with traders awaiting fresh direction after the week-long rally looks to have run out of steam ahead of resistance in the 0.6400 area.
NZDUSD
NY Open: 0.5914, Overnight Range: 0.5887-0.5931
NZDUSD is steady and near the top of its recent range. The risk of more inflammatory headlines around the China/US trade war will limit gains in the near term.
USDMXN
NY Open: 20.0715, Overnight Range: 19.9298-20.1460
USDMXN is consolidating this week’s losses with prices undermined by the absence of fresh US tariff news about Mexico, with Trump’s attention seemingly diverted to China. President Sheinbaum’s team are in active trade negotiations but making little progress. The intraday USDMXN turned bullish with the move above 20.0630 and is looking for a retest of resistance at 20.1500.
Chart: USDMXN 4 hour
China Snapshot`
PBoC fix: 7.2133 vs exp. 7.3272 (Prev. 7.2096).
Shanghai Shenzhen 300 rose 0.31% to 3772.82
China Q1GDP q/q 1.2% vs. forecast 1.4% (Prev. 1.6%); Q1 GDP 5.4% y/y vs. forecast 5.1% (Prev. 5.4%).
March Industrial Production 7.7% vs. previous 5.9, Retail Sales 5.9%y/y vs. previous 4.0%
FX high, low, open (as of 6:00 am ET)
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
