March 14, 2025
- US Government shutdown fears ease and equities rally
- Gold tops $3,000.00 on safe-haven demand.
- USD opens mixed due to China stimulus and US recession talk.
FX at a Glance
USDCAD: open 1.4440, overnight range 1.4411-1.4448, close 1.4442
USDCAD traders have a lot to be worried about, and while Trump and his whack-a-doodle sycophants, “LapDog” Lutnik and “Suey, Suey” Vance, top the list, domestic politics and climate change policies are a close second. And those climate change policies will move to the top of the list starting today when Mark Carney becomes Prime Minister.
Mr. Carney makes Environmental Minister Stephen Guilbeault, a zealot, look like a fraud. If you thought Guilbeault’s anti-energy, anti-fossil fuel policies were harmful to the Canadian economy, Mark Carney is the nuclear option.
Carney co-founded the Glasgow Financial Alliance for Net Zero (GFANZ). Its goal is to steer (force) global finance away from financing new fossil fuel projects while encouraging banks and investors to de-fund oil and gas projects. In short, his goal is the complete eradication of Canada’s energy industry.
Ontario Premier Doug Ford returned from Washington without securing any tariff concessions but claimed the meeting was, “This, I can honestly say, was the best meeting I’ve ever had coming down here. We want the best outcome for both countries. We’re like a family — sometimes there’s tension between families, but that was an extremely productive meeting. I’m feeling positive.” I hope the “family” he is referring to is not the Menendez Brothers.
WTI oil prices caught a bit of a bid and rose from 66.68 to 67.48 on profit-taking and reports that both China and India have reduced Russian oil deliveries in the face of sanction fears. However, the recent IEA report warning of an oil glut in 2025 will limit gains.
Option expiries will keep traders on their toes at the 10 a.m. window. There are $807 million of 1.4400-05 strikes and $1.1 billion of 1.4450 strikes maturing.
Canada Manufacturing Sales rose 1.7% m/m in January (forecast 2.0%, previous 0.5%). Wholesale Sales rose 1.2% m/m (forecast 1.9%, previous 0.3%). data is ahead.
U.S. Michigan Consumer Sentiment Index is on tap.
USDCAD
The short-term USDCAD technicals are neutral as prices are consolidating in a symmetrical triangle pattern. A break above 1.4470 opens the door to a renewed rally, while a break below 1.4370 puts 1.4270 in play.
The medium-term outlook remains bullish above 1.4370 but enthusiasm is waning as RSI and MACD are around neutral.
For today, USDCAD support is 1.4370 and 1.4340. Resistance is at 1.4450 and 1.4480.
Today’s Range: 1.4430-1.4460
Chart: USDCAD 4 hour
Axis of Evil-2025
Former President George W. Bush described Iran, Iraq, and North Korea’s relationship as an “Axis of Evil.” The 2025 version is Russia, China, and Iran. Those nations met in Beijing today to express support for Iran after Trump demanded new talks or warned of a military solution. Iran told Trump to “get stuffed” or words to that effect.
Equity Sell-off Pauses
Wall Street closed deep in the red again yesterday, but Asian traders didn’t care. The prospect of more stimulus in China boosted Hong Kong’s Hang Seng index by 2.12% for a one-month gain of 5.92%, which is a stellar performance compared to the 9.7% loss in the S&P 500 in the same period. European bourses rallied, led by a 0.76% gain in the French CAC 40 index. The UK FTSE 100 index is up despite negative economic growth in January.
S&P 500 futures have risen 0.66% (as of 6:30 a.m.), with gains supported by reports that U.S. policymakers will avert a government shutdown. The gains did not stop investors from looking for safe-haven assets, which propelled gold (XAUUSD) to 3004.95 in early New York before prices retreated.
EURUSD
NY Open: 1.0852, Overnight Range: 1.0831-1.0909
EURUSD traded with a negative bias until just before the NY open, when prices bounced to the peak in a move fueled by improved risk sentiment. The rebound in S&P 500 futures and the improved odds that the U.S. government avoids a shutdown supported prices. EURUSD continues to be underpinned by hopes for Germany’s jumbo stimulus plan. Traders shrugged off German HICP data (actual 2.6% y/y vs. forecast and previous level of 2.8%) as the ECB already has a dovish bias.
GBPUSD
NY Open: 1.2928, Overnight Range: 1.2918-1.2959
GBPUSD shrugged off a slew of weaker-than-expected economic reports and is at the top of its overnight range. The UK economy drifted into contraction territory in January with a -0.1% m/m reading for GDP, which was blamed on a 0.9% drop in factory production. Chancellor Rachel Reeves took note of the drop and said, “The world has changed, and across the globe we are feeling the consequences.” However, GBPUSD is supported because retaliatory tariffs on Trump threaten to drive the U.S. economy into recession.
USDJPY
NY Open: 148.97, Overnight Range: 147.75-149.02
USDJPY rallied from its session low in part because the largest union (Rengo) only secured 5.46% wage increases after demanding 6.05%. The rally may have just been a knee-jerk reaction, and further gains may be limited because of the prospect of BoJ rate hikes and slightly improved odds for Fed rate cuts.
AUDUSD
NY Open: 0.6302, Overnight Range: 0.6278-0.6311
AUDUSD rallied on improved risk sentiment reflected in the equity rally. The talk of another massive stimulus program in China also supported prices.
NZDUSD
NY Open: 0.5719, Overnight Range: 0.5694-0.5730
NZDUSD tracked AUDUSD, supported by the improving economic outlook for China and rising recession risks in the U.S. However, the RBNZ still has a dovish bias, and the risk of more rate cuts should limit gains.
USDMXN
NY Open: 20.0154, Overnight Range: 20.0105-20.1221
USDMXN is consolidating its recent losses, fueled by broad-based U.S. dollar weakness and Trump’s tariff outrage focused on Canada rather than Mexico. The intraday USDMXN technicals are bearish below 20.1080.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.1738 vs exp. 7.2463 (Prev. 7.1728).
Shanghai Shenzhen CSI 300 rose 2.43% to 4006.56
The PboC, Finance Ministry, Commerce Ministry and other key ministries are reportedly planning a press conference on Monday to announce a series of measures to boost consumption. The prospect of additional stimulus fueled the rally in Chinese equity indexes.
Sources: Yahoo Finance, Oanda, Investing.com,
