March 19, 2025
- BoJ leaves rates unchanged at 0.5%.
- FOMC expected to leave rates unchanged
- USD inched higher on profit taking ahead of the Fed announcement
FX at a Glance
USDCAD: open 1.4322, overnight range 1.4296-1.4332, close 1.4300
The new guy gets all the breaks. Prime Minister Mark Carney, anointed by the Liberal party does not even have a seat in parliament, yet media outlets like CBC have essentially proclaimed him to be the saviour of Canada. And now, President Trump has endorsed Carney, in a back-handed way. He said “I think it’s easier to deal actually with a Liberal and maybe they’re going to win, but I don’t really care. It doesn’t matter to me at all.
He said this about Pierre Poilievre “the Conservative that’s running is, stupidly, no friend of mine. I don’t know him, but he said negative things. When he says negative things, I couldn’t care less,”
WTI oil prices consolidated yesterday’s losses in a 66.10-66.73 range with negative pressure stemming from higher-than-expected crude inventories in the US. In addition, the slight improvement in the odds for a Russia Ukraine ceasefire.
Reportedly, there are $1.4 billion of 1.4315-1.4325 option strikes maturing at 10:00 am EDT.
There are not any US or Canadian economic releases of note today.
USDCAD
The short-term USDCAD technicals are bullish while prices are above 1.4280 and looking for a move above 1.4350 to extend gains to 1.4420. A move below 1.4280 targets 1.4240.
Longer term, USDCAD remains in the uptrend that started in September but a decisive move below 1.4270 suggests further losses to 1.4150
For today, USDCAD support is 1.4270 and 1.4240. Resistance is at 1.4360 and 1.4410
Today’s Range: 1.4270-1.4370
Chart: USDCAD 4 hour
FOMC-Slow and Steady
The FOMC is widely expected to leave rates unchanged this afternoon, but Trump’s tariff turmoil threatens to weaken the US growth outlook, as well as growth in the rest of the world. U.S. dollar direction is in the dots—the dot-plot projections. The tariffs are expected to lead to lower growth and higher unemployment. ING Bank analysts are predicting that the Fed will lower 2025 GDP to 2.0% from 2.1%, while leaving inflation (CPI 2.5%) and unemployment (4.3%) unchanged.
EURUSD
NY Open: 1.0904, Overnight Range: 1.0873-1.0947
EURUSD is consolidating yesterday’s gains after the German Bundestag paved the way to a €500 billion defense and infrastructure spending package. The only issue is that the country’s government is in “transition,” and no one knows which party will implement the spending plans as the “debt brake” is removed. Eurozone HICP ticked down to 2.3% from 2.4% y/y, but the news was ignored. EURUSD is also vulnerable to a setback in hopes for a Ukraine-Russia ceasefire. The long-term technicals are bearish while prices are below 1.1040 (monthly chart).
GBPUSD
NY Open: 1.2971, Overnight Range: 1.2958-1.3005
GBPUSD has erased yesterday’s gains ahead of this afternoon’s FOMC data and tomorrow’s Bank of England meeting. The BoE is expected to leave rates unchanged due to the inflation decline appearing to have stalled. However, the statement is expected to be neutral due to the uncertainty around global growth and Trump’s tariffs. Nevertheless, the GBPUSD technicals are bullish while above 1.2920.
USDJPY
NY Open: 149.77, Overnight Range: 149.15-150.02
The Bank of Japan surprised no one when they left interest rates unchanged at 0.50%. USDJPY bobbed and weaved, then opened in NY today where it opened yesterday. The accompanying statement was the usual blather about inflation heading toward its target and the increased uncertainty around global trade policies. Some analysts are predicting a rate hike in May if the next round of inflation data is higher than expected.
AUDUSD
NY Open: 0.6332, Overnight Range: 0.6322-0.6367
AUDUSD peaked in Asia and is trading near its overnight low due to caution ahead of today’s FOMC meeting. Australia’s Treasurer Jim Chalmers risked the wrath of Trump when he complained about Australia’s treatment with tariffs on steel and aluminum. American pharmaceutical companies have written to Trump, saying that Australia’s Pharmaceutical Benefits Scheme is an “unfair trade practice” and urging reciprocal tariffs.
NZDUSD
NY Open: 0.5789, Overnight Range: 0.5779-0.5821
NZDUSD traded sideways in early Asian markets, then dropped to the session low. New Zealand current account data was a non-factor with the FOMC monetary policy decision looming.
USDMXN
NY Open: 19.9724, Overnight Range: 19.9018-20.0294
USDMXN clawed back some of yesterday’s losses due to caution ahead of today’s FOMC meeting. Prices are underpinned by Monday’s OECD report forecasting a recession in 2025 and 2026. Trump’s tariffs are predicted to shrink GDP by 1.3% in 2025 and 0.6% in 2026. Mexican President Claudia Sheinbaum was dismissive of the forecasts.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.1697 vs exp. 7.2330 (Prev. 7.1733)
Shanghai Shenzhen CSI 300 rose 0.06% to 4010.17
Bloomberg notes: Analysts at B of A are warning that Chinese stocks will face a “meaningful correction soon” after the Hang Sange China Enterprises Index and the MSCI China index rallied about 30% since January’s low.
Sources: Yahoo Finance, Oanda, Investing.com,
