March 3, 2025

• Tariff Tuesday looming-Traders hoping for reprieve.
• Geopolitics and ISM Manufacturing PMI in focus today
• USD opens lower from Friday’s close.

FX at a Glance

USDCAD: open 1.4428, overnight range 1.4422-1.4453, close 1.4466

USDCAD opened below Friday’s close in Asia, then drifted lower throughout the overnight session. Traders are hoping that U.S. Commerce Chief Howard Lutnick has a clue as to Trump’s tariff plans and was not just spouting off to sound more influential than he is. Mr. Lutnick raised hopes that when Trump signs the order for tariffs on Canada, they will be lower than the 25% previously stated. Mr. Lutnick said, “There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we’re going to leave that for the president and his team to negotiate.” In a nutshell, Lutnick doesn’t have a clue.

Trump has created a “fake news” narrative around fentanyl to justify tariffs, claiming the drug is pouring into the U.S. from Canada. And his latest cure for the non-issue is to order an investigation into the national security threat posed by Canadian lumber imports.

Meanwhile, the media is reporting how Canada GDP “gained momentum” to rise 2.6% y/y in Q4. It is not great news because, as Lorrie Goldstein wrote in the Toronto Sun, the results showed Canada’s GDP per capita fell by 1.4% in 2024 following a 1.3% decline in 2023. Mr. Goldstein went on to quote a Fraser Institute report showing how Canada’s real GDP per capita rose 1.9% during Trudeau’s reign compared to 14.7% in the U.S. Forget about a Canada-U.S. trade war—it will be a trade walkover.

There are some chunky option expiries at 10:00 a.m. NY time today, including $1.8 billion of 1.4400 strikes and $2.0 billion of 1.4440 strikes maturing.

WTI oil chopped in a 69.26-70.60 range. Trump’s threat to double the planned tariffs on China from 10% to 20% drove prices to the session low, but better-than-expected China Manufacturing PMI results gave prices a boost.

USDCAD Technicals.

The intraday USDCAD technicals are bullish inside a 1.4400-1.4470 range and looking for a move above 1.4495 to extend gains to 1.4550. A break below 1.4400 suggests further losses to 1.4360.

The 4-hour chart shows the USDCAD uptrend line is intact while prices are above 1.4210. However, the MACD has turned negative, but the RSI is neutral which suggests a lack of conviction for the downside.

For today, USDCAD support is 1.4410 and 1.4370. Resistance is at 1.4470 and 1.4520

Today’s Range: 1.4390-14490

Chart: USDCAD daily    

Pomp and Possum Pie

Billionaires and Hillbillies don’t usually mix in the same diplomatic circles, but when they do, it is a clown-show car-wreck catastrophe. Ukraine President Volodymyr Zelenskyy met in the Oval Office to discuss receiving a U.S. military security guarantee in exchange for 50% of Ukraine’s mineral rights. President Trump agreed to taking 50% but only as payment for previous services rendered. The hillbilly Vice President then snarled that Zelenskyy had not said “Thank you” to the United States, which is a blatant lie. The meeting deteriorated from there, and either Zelenskyy got up and left or Trump kicked him out. There is no proof that Trump’s next move was to take a call from Putin and ask him what he should do next.

Data Overshadowed
The U.S. ISM Manufacturing PMI data is on tap today, followed this week by a series of U.S. employment reports ahead of Friday’s marquee nonfarm payrolls report. The data is usually a good indicator of what the Fed will do with interest rates; however, Trump’s plans for a global trade war handcuff policymakers.

EURUSD
NY Open: 1.0442, Overnight Range: 1.0389-1.0445
EURUSD recouped all of Friday’s losses on hopes that Ukraine and the U.S., with help from the EU, will mend fences while Trump waters down his plan for tariffs on Canada and Mexico. If he does, it suggests that the tariff threat to the EU is diminished. Eurozone inflation ticked down to 2.4% y/y in February compared to 2.5% in January; however, the forecast was 2.4%. Still, inflation is heading in the right direction.

GBPUSD
NY Open: 1.2647, Overnight Range: 1.2582-1.2649
GBPUSD rallied alongside broad-based U.S. dollar weakness. Manufacturing PMI was 46.9 in February, compared to 46.4 in January. The results were ignored as they showed the UK economy was still in contraction territory.

USDJPY
NY Open: 150.86, Overnight Range: 149.95-151.02
USDJPY rallied despite broad U.S. dollar weakness because of comments by BoJ Governor Kazuo Ueda. He warned that Trump’s tariffs and the prospect of a global economic slowdown would require policymakers to be extra vigilant when setting monetary policy. His remarks dampened enthusiasm for negative USDJPY trades and helped underpin the currency pair.

AUDUSD
NY Open: 0.6223, Overnight Range: 0.6209-0.6231
AUDUSD inched higher on improved risk sentiment, with Australian and China PMI data providing an added boost.

NZDUSD
NY Open: 0.5605, Overnight Range: 0.5594-0.5614
NZDUSD traded sideways and did not get much support from the improved risk sentiment and the weaker U.S. dollar.

USDMXN
NY Open: 20.4656, Overnight Range: 20.4234-20.5537
USDMXN is trading with a modest bid ahead of Trump’s tariffs on Tuesday. Mexican authorities are attempting to get a reprieve by matching U.S. tariffs on China.

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

China Snapshot

PBoC fix: 7.1745 vs exp. 7.2857 (prev. 7.1738).

Shanghai Shenzhen CSI 300 fell 0.4% to 3888.47

Caixin February Manufacturing PMI 50.8 vs forecast 50.3, previous 50.1

Sources: Yahoo Finance, Oanda, Investing.com,