March 11, 2025

  • Trump accuses Ontario of breaking the rules with electricity surcharge.
  • US recession risks rise as Wall Street sinks
  • USD consolidates yesterdays gains except against EUR and GBP

FX at a Glance

USDCAD: open 1.4414 overnight range 1.4394-1.4448, close 1.4440

USDCAD is attempting to recover some of yesterday’s losses triggered by what almost looked like “panic-selling” on Wall Street. The Nasdaq was hit especially hard and closed down 4.00%, which wiped out $1.1 trillion in value. Investors reacted poorly to Trump’s weekend comments that suggested a US recession was not out of the question.

Yesterday, Trump took umbrage at Ontario Premier Doug Ford and whined, “Ontario just announced a 25% surcharge on ‘electricity,’ of all things, and you’re not even allowed to do that.”

Oh, oh! That is not good for Canada. The petulant President stamped his feet, shook his tiny little fists, and said, “Because our Tariffs are reciprocal, we’ll just get it all back on April 2. Canada is a Tariff abuser, and always has been, but the United States is not going to be subsidizing Canada any longer. We don’t need your Cars, we don’t need your Lumber, we don’t need your Energy, and very soon, you will find that out. MAKE AMERICA GREAT AGAIN!!!”

That doesn’t bode well for the Canadian dollar. The odds of a full-blown US/Canada trade war that lasts at least six months must be high. Canada does not have a functioning government and has two Prime Ministers—one won’t leave the office, and the other doesn’t even have a seat in Parliament. Who speaks for Canada? The current government may not be around in three months, and the new party may not honor any of their trade deals.

The Bank of Canada steps to the plate tomorrow and is widely expected to cut its benchmark rate by 25 bps to 2.75%.

Once again, chunky option expiries will roil USDCAD if prices are in the 1.4390-1.4410 area when $1.04 billion of strikes roll off.

There are no Canadian economic reports today and only the JOLTS job openings data from the US.\

USDCAD Technicals

The short-term USDCAD technicals are bullish, having broken above 1.4380 yesterday and looking for a break above 1.4460 to extend gains to the 1.4550-70 area. Failure to break above 1.4460 suggests further 1.4360-1.4460 consolidation today.

The medium-term outlook is bullish above the 1.4270-1.4300 area, but momentum indicators show a lack of conviction, suggesting further range trading. A move above 1.4460 argues for a rally to 1.4570.

For today, USDCAD support is 1.4380 and 1.4340. Resistance is at 1.4460 and 1.4510.

Today’s Range: 1.4350-1.4450

Chart: USDCAD daily    

Dead Cat Bounce?

The S&P 500 lost 3.70% yesterday and is down 4.54% YTD. Trump’s drive to Make America Great Again is actually Making America Poorer. There is a glimmer of hope that all will be forgiven. S&P 500 futures are up 0.36% in pre-market trading, and the US 10-year Treasury yield has climbed from its overnight low of 4.17% to 4.212%.

US recession fears and elevated risk-off sentiment led to Asian equity indexes losing ground across the board, except for China’s main indices. The Australian ASX 200 fell 0.91%, while Japan’s Topix lost 1.11%. European bourses are higher except for the UK FTSE 100 index, which is down 0.10%. Gold climbed $24.25 to 2913.61.

Ukraine Going Out with a Fight

President Trump’s BF, Vlad Putin, may have choked on his supper after Ukraine unleashed about 337 drones on Moscow. The move appeared to be timed with the US/Russia meeting in Saudi Arabia to discuss a cease-fire with Ukraine and in retaliation for Moscow attacking Kyiv.

EURUSD
NY Open: 1.0905, Overnight Range: 1.0831-1.0921

EURUSD is enjoying a long-awaited resurgence, having climbed from 1.0384 on March 3 to 1.0921 today. It is a huge move and evidence that investors believe the Eurozone economy has more upside than Trump’s “Fortress America.” Last week’s announcement by Germany and EU officials of a jumbo increase in defense and infrastructure spending fueled the gains. Today, there are indications that the German Green Party will support the CDU plan. However, the steepness of the EURUSD rally suggests prices will consolidate before moving higher.

GBPUSD
NY Open: 1.2933, Overnight Range: 1.2873-1.2942

GBPUSD gained on the back of broad US dollar weakness vs. EURUSD. Traders ignored the BRC Like-for-Like Retail Sales data, which showed sales rose just 0.9% in February, compared to 2.5% in January.

USDJPY
NY Open: 147.38, Overnight Range: 146.54-147.52

USDJPY rebounded from its overnight session low and is trading at 147.62 in NY. It appears to be a profit-taking rally after safe-haven demand for yen ebbed when Euro area stocks climbed. Japan’s Q4 GDP rose 2.2% y/y compared to 2.8% previously and 0.6% q/q.

AUDUSD
NY Open: 0.6290, Overnight Range: 0.6259-0.6298

AUDUSD suffered from negative risk sentiment and the ongoing US/China trade war. Westpac reported Consumer Confidence rose 4.0% in March compared to 0.1% in February, while the NAB version of Consumer Confidence was 4 compared to 2 in February. Traders did not care.

NZDUSD
NY Open: 0.5708, Overnight Range: 0.5876-0.5712

NZDUSD traded defensively due to widespread negative risk sentiment. The improvement in Manufacturing Sales for Q4 (actual 1.1% vs. -0.9% previously) was ignored.

USDMXN
NY Open: 20.2508, Overnight Range: 20.3006-20.3985

USDMXN traded sideways with a bullish bias, with price action torn between US recession risks and US tariffs on Mexico. Yesterday’s Consumer Confidence data (actual 46.5 vs. 47.2%) did not have much of an impact on trading.

FX high, low, open (as of 6:00 am ET)

China Snapshot

PBoC fix:  7.1741 vs exp. 7.2597 (Prev. 7.1733).

Shanghai Shenzhen CSI 300 rose 0.32% to 3941.42

Sources: Yahoo Finance, Oanda, Investing.com,