April 1, 2025
- Tariff threat has traders spinning their wheels.
- US JOLTS and ISM Manufacturing PMI on tap
- US dollar opens mixed compared to yesterday-commodity bloc underperforms..
FX at a Glance
USDCAD: open 1.4369, overnight range 1.4367-1.4404, close 1.4388
USDCAD is trading with a bullish bias ahead of Trump’s tariff announcement on Wednesday afternoon. The big question is whether or not the looming tariffs are reflected in the current rate.
The latest CBOE Commitment of Traders report shows that CAD sentiment is bearish, but positions have been reduced sharply. Traders slashed CAD exposure across the board, with open interest plunging 66.8K contracts — the biggest weekly shakeout in months. Positioning is still bearish, but conviction is fading fast.
Liberal leader Mark Carney earned a reputation as a “flip-flopper” during his tenure at the Bank of Canada and the Bank of England. He hasn’t changed. The day after he stood behind Liberal candidate Paul Chiang and declared his unwavering support for the man who advocated his supporters kidnap a rival candidate and take him to the Chinese embassy to collect a reward, Carney declared it a “teaching moment,” and then decided (after much uproar) to turf the guy in a move disguised as a resignation.
WTI oil rose to 71.99 from 71.12 due to short positions being unwound after Trump threatened Russia with more tariffs and revoked permits and licences for Western oil companies to drill in Venezuela.
USDCAD Technicals
The intraday USDCAD technicals are bullish above 1.4305 and looking to extend gains above 1.4400 to 1.4450. A break below 1.4400 targets 1.4330.
The USDCAD uptrend line from November remains intact while prices are above the 1.4220-40 area and looking for a test of resistance at 1.4550.
For today, USDCAD support is 1.4330 and 1.4300. Resistance is at 1.4405 and 1.4440.
Today’s Range: 1.4330-1.4430
Chart: USDCAD 1 day
“And the Jester Sang or the King and Queen”
The world is waiting for President Trump to shout “April Fools! Har, har, har. I was just kidding about tariffs.” Except he won’t. He is reportedly planning a tariff announcement event from the Rose Garden on Wednesday, April 2, at 3:00 p.m. EDT. Markets reacted with a sigh of relief—maybe there will finally be some clarity. Except there will be no such luck. Reportedly, the Trump administration has yet to work out the details.
The market relief (fatigue) around tariffs helped Wall Street close with mild gains. Asian equity indexes followed suit, led by a 1.04% rise in Australia’s ASX 200 and a 0.11% gain in Japan’s Topix. European equity indexes are higher, with the German Dax and French CAC 40 (+1.36% and 0.99%, respectively) leading the charge higher. S&P 500 futures are flat, while the 10-year Treasury yield dipped to 4.17% from 4.21%. Gold (XAUUSD) consolidated its safe-haven gains in a 3120.18–3149.03 range.
US Data Overshadowed by Tariffs
ISM Manufacturing PMI is expected to have contracted to 49.5 from 50.3 in February, and the JOLTS Job Openings data is expected to show job openings fell by 110,000 to 7.63 million in February. The results will keep the “US recession risk” narrative alive, but the market impact will be negligible due to tariffs.
New York Fed President John Williams and Atlanta Fed President Thomas Barkin pointed to the lack of clarity around tariffs as the main reason for leaving rates unchanged. That makes Fed Chair Jerome Powell’s speech on Friday more interesting, as it occurs two days after Trump’s “Liberation Day.”
EURUSD
NY Open: 1.0818, Overnight Range: 1.0799–1.0831
EURUSD is choppy but has a bit of a bid while trading above 1.0790. Eurozone inflation ticked lower, with headline CPI rising 2.2% in March (February 2.3%) and Core CPI rising 2.4% (February 2.6%). The data supports calls for a 25 bp ECB rate cut on April 17, but the impact of Trump’s tariffs may change that.
GBPUSD
NY Open: 1.2935, Overnight Range: 1.2902–1.2941
GBPUSD traded inside yesterday’s range and is just above its overnight session low in early NY trading. The only UK data was the BRC Shop Price Index, which fell 0.4% in March, a tad better than the -0.7% dip in February. UK Prime Minister Keir Starmer claimed that US/UK trade talks are “well advanced,” and he is hoping they will reach a deal to help the UK avoid new US tariffs. He obviously overlooked the fact the Trump deals are written in disappearing ink on toilet paper.
USDJPY
NY Open: 149.83, Overnight Range: 149.51–150.14
USDJPY consolidated yesterday’s gains with Trump tariff concerns overshadowing Japanese economic data. The February unemployment rate ticked down to 2.4% from 2.5% in January. The BoJ Tankan survey for big manufacturers was 12, a tad lighter than the 14 in January, with the dip blamed on tariff threats. Manufacturing PMI ticked up to 48.4 from 48.3.
AUDUSD
NY Open: 0.6266, Overnight Range: 0.6232–0.6276
AUDUSD ticked higher cautiously and is underpinned by the RBA decision to leave interest rates unchanged at 4.10%. Governor Michele Bullock denied that the ongoing Australian election was behind the decision to stand pat. She noted that monetary policy was well-positioned to respond to tariff fallout. Australian Retail Sales rose 0.2% m/m in February compared to the forecast and previous result of 0.3%.
NZDUSD
NY Open: 0.5683, Overnight Range: 0.5663–0.5689
NZDUSD traded sideways but with a slight negative bias. Traders are on the sidelines and cautious ahead of Trump’s China tariffs.
USDMXN
NY Open: 20.4547, Overnight Range: 20.4425–20.5183
USDMXN is bid and consolidating recent gains ahead of Tariff Wednesday. Prices are supported by expectations that Banxico will follow last week’s rate cut with another 50 bp cut as soon as the next meeting, due to the rising risk of a Mexican recession.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.1775 vs exp. 7.2606 (Prev. 7.1782)
Shanghai Shenzhen 300 unchanged at to 3887.69
Caixin March Manufacturing PMI 51.2 vs. forecast 51.1, Previous 50.8. Composite PMI 51.4 forecast 51.1 This marked the sixth successive month in which the index has posted above the neutral 50.0 mark, signalling an improvement in manufacturing sector conditions.
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
