April 8, 2025
- Global equity indexes clawing back losses
- Trump says he won’t negotiate on tariffs, then says maybe I will.
- US dollar opens mixed
FX at a Glance
USDCAD: open 1.4198 overnight range 1.4146-1.4246, close 1.4252
USDCAD is a sea of tranquility in the face of global FX volatility. Part of the reason is that Canada escaped the brunt of Trump’s tariff attack on the global economy. That’s not because the Donald cares anything about Canada, but because he was unwilling to face the wrath of the auto manufacturers.
The Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations were rather downbeat. The BOS indicator fell to -2.14 and 1/3 of survey respondents expect a recession this year. In addition, those expecting inflation to be above 3.0% rose by 3 points to 23%.
WTI prices traded negatively in a 60.18-61.75 range. Fears of a global recession, Saudi Arabia’s price cuts and increased OPEC production are driving down prices. Goldman Sachs analysts warned that if there was a global economic slowdown and a full unwind of OPEC production cuts, Brent could fall below 40/barrel in 2026. They also said it was a worst-case scenario and not the bank’s base view.
Canada’s Ivey PMI report is expected to show a decline to 53.3 from 55.3.
USDCAD Technicals
The intraday USDCAD technicals are bearish below 1.4260 with a break below 1.4140 targeting 1.4105. A break above 1.4260 puts 1.4340 in play.
Longer term, the USDCAD uptrend is intact but the failure to sustain gains above 1.4450 and the subsequent drop below the 100-day moving average at 1.4285 suggests waning upside momentum. A break below 1.4100 targets 1.3960.
For today, USDCAD support is 1.4140 and 1.4100. Resistance is at 1.4210 and 1.4240.
Today’s Range: 1.4130-1.42430
Chart: USDCAD 1 day
Stocks Rebound
Global stock markets are clawing back some losses after the White House claimed 70% of countries are queuing up to negotiate. Trump is doing everything he can to stir the pot, saying, “There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.”
Asian equity indexes closed sharply higher, led by a 6.26% rebound in Japan’s Topix. Australia’s ASX 200 gained 2.27% while the Hong Kong Hang Seng index rose 1.51%.
European bourses joined the party. As of 8:30 am, the UK FTSE 100 is up 2.48%, the German DAX has risen 2.51% and S&P 500 futures are up 2.46%. The US 10-year Treasury yield is 4.18%. The was enough to knock the CBOE Volatility Index (VIX) from its peak of 60.0 yesterday to 40.25 today.
EURUSD
NY Open: 1.0919, Overnight Range: 1.0711-1.0994
EURUSD rallied but it stalled just below 1.1000. Trump’s tariffs and fears of widening EUR/US interest rate differentials in favour of the US are limiting gains. The ECB is expected to cut rates by 25 bps at its April 17 meeting while the Fed is expected to leave rates unchanged.
GBPUSD
NY Open: 1.2744, Overnight Range: 1.2724-1.2795
GBPUSD is struggling to make gains after hitting 1.2705 yesterday and it is underperforming against the euro. Nevertheless, GBPUSD remains in its 2025 uptrend while prices are above 1.2680.
USDJPY
NY Open: 147.16, Overnight Range: 146.96-148.12
USDJPY has a lot going on. Traders are digesting BoJ rate hikes and increased odds that the Fed will cut more than expected against a background of 25% US tariffs. Japanese equity indexes soared on reports that Japan secured priority trade talk negotiations with the US after Trump and Japanese President Ishiba spoke.
AUDUSD
NY Open: 0.6040, Overnight Range: 0.5984-0.6075
AUDUSD clawed back some of yesterday’s losses but it is still trading defensively. The NAB monthly business survey showed business conditions were largely unchanged while business confidence fell to -3 from -2. The escalation of the US/China trade war will limit AUDUSD gains.
NZDUSD
NY Open: 0.5588, Overnight Range: 0.5532-0.5625
NZDUSD rallied from yesterday’s low despite China’s PBoC fixing the yuan at an 18-month low. New Zealand Finance Minister Nicola Willis said that the government will not change its economic and fiscal plans despite Trump’s 10% tariff. The RBNZ is almost universally expected to cut its benchmark Overnight Cash Rate (OCR) by 25 bps to 3.5% on Wednesday.
USDMXN
NY Open: 20.6426, Overnight Range: 20.5360–20.7140
USDMXN consolidated yesterday’s gains and is in the middle of its overnight band. Somewhat improved risk sentiment due to rebounding equity markets helped to cap gains. Traders are awaiting Thursday’s Banxico meeting.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.2038 vs exp. 7.3321 (Prev. 7.1980)
Shanghai Shenzhen 300 rises 1.71% to 3650.76.
Trump threatens to boost tariffs on China by another 50%, taking them to 104% because China retaliated. The PboC fixed USDCNY at its lowest level since September 2023.
Trump also said he would end US/China trade negotiations. Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
