April 4, 2025
- Blow-out NFP- Pathetic Canadian job numbers
- Global equities continue to fall in wake of Trump tariffs.
- US dollar claws back some of yesterday’s losses
FX at a Glance
USDCAD: open 1.4125, overnight range 1.4054-1.4242, close 1.4097
Global equity indexes melted down in early NY trading and that sent USDCAD to 1.4209. It is shaping up to be a very volatile trading day.
Canada lost 32,600 jobs in March. Fortunately, the public sector was spared (they only lost 2800) but the private sector got hammered, losing 47,800 jobs. with the unemployment rate rising to 6.7% from 6.6%. Better-than-expected results will be ignored, while weaker data feeds into the rising recession risk narrative. US nonfarm payrolls blew away forecasts with a gain of 228,000 (forecast 135,000) but the unemployment rate ticked up to 4.2% from 4.1%. USDCAD rallied on the news.
Take that, Donnie – Acting Prime Minister Mark Carney retaliated to Trump’s tariffs by putting tariffs on US-made cars. Trump may not be happy and previously warned that if any country retaliates, he will raise tariffs higher.
WTI oil prices dived from 66.90 to 61.77, after eight OPEC member nations said they would nearly triple production. Analysts said the move is designed to punish cartel members that are cheating and producing over their quotas. The drop was exacerbated by the weak US dollar and the risk of a global recession from Trump tariffs.
USDCAD Technicals
The intraday USDCAD technicals flipped to bullish with the failure to sustain losses below 1.4040 and is in a modest uptrend (hourly chart) while prices are above 1.4060. A move above 1.4210 targets 1.4260.
The medium-term technicals suggest the uptrend is intact but the retreat from the 1.4275 level (38.2% Fibonacci retracement of the Oct-February range) and soft momentum indicators suggest USDCAD is vulnerable to the downside. A close below 1.4100 suggests further losses to 1.3950
For today, USDCAD support is1.4100 and 1.4050. Resistance is at 1.4230 and 1.4260.
Today’s Range: 1.4160-1.4260
Chart: USDCAD 1 day
Businessman Trump Crushes Businesses
President Trump’s effort to rebuild America in his image is working. Trump, the man who managed to bankrupt six companies, including three casinos has turned his talents to major US corporations. Trump’s minimum tariff levy on imports into the US is making America’s poorer, almost instantly. The following graphic is from Bloomberg:
Global Recession Odds Rise to 60%
President Trump single-handedly raised the odds for a global recession from 40% to 60% in 2025 thanks to his disruptive, unfriendly business practices, according to analysts from JPMorgan. They noted, “The direct impact of what looks like a cumulative 20%-pt rise in US tariff rates this year would be the largest tax increase on US households and business since the Revenue Act of 1968, which preceded the 1969–70 recession.”
Equity Traders Heading for the Hills
Wall Street closed with its worst losses in 5 years. The negative sentiment fueled an Asian equity index sell-off led by a 3.37% slide in Japan’s Topix and a 2.44% drop in Australia’s ASX 200. European bourses are free-falling. Germany’s DAX index is down 3.82%, trailed by a 3.67% drop in the French CAC 40. S&P 500 futures were down over 3.4% pre-NFP and have recovered somewhat to -2.67%. which still points to another messy day on Wall Street. The US 10-year yield is sitting at 3.90%. compared to yesterdays close of 4.04%.
Powell and Payrolls
US nonfarm payrolls gained 228,000 jobs in March (forecast) while the unemployment rate rose to 4.2% from 4.1%. unchanged at 4.1%. The results will reinforce the Fed’s stand—pat stance .
Fed Chair Jerome Powell will attempt to assuage market fears when he delivers an economic outlook at 11:30 a.m. EDT. Yesterday, Fed Vice Chair Harold Patterson and Governor Lisa Cook said that there was no hurry to adjust policy and now is the time to be “patient but attentive.”
EURUSD
NY Open: 1.10985, Overnight Range: 1.0972–1.1108
EURUSD inched higher in Asia then retreated rapidly in Europe to open just above its session low in NY. EURUSD suffered from expectations that the ECB will be forced to cut rates at least three more times this year to deal with the rising recession risk. German factory orders were flat.
GBPUSD
NY Open: 1.2988, Overnight Range: 1.2963–1.3114
GBPUSD peaked in Asia then dropped steadily into the NY open. The odds of a 25% rate cut at the next BoE meeting in May have risen to 86%, and that cut will be followed by at least two more. The UK government is denying Trump’s claim that Prime Minister Keir Starmer was “very happy” with the 10% tariff.
USDJPY
NY Open: 146.35, Overnight Range: 145.30–146.55
USDJPY traded choppily but sideways overnight and opened in New York, unchanged from yesterday. USDJPY remains on the defensive due to safe-haven demand for yen and lower US 10-year Treasury yields. BoJ Deputy Governor Shinichi Ueda said the bank would raise rates if reaching its inflation target becomes more likely.
AUDUSD
NY Open: 0.6201, Overnight Range: 0.6197–0.6334
AUDUSD opened on the defensive, slid steadily overnight, and opened at its session low in New York. AUDUSD’s fortunes are closely aligned with China, and Trump’s combined 54% tariff levy on Chinese imports will have a negative impact on Australia’s trade with China.
NZDUSD
NY Open: 0.5690, Overnight Range: 0.5681–0.5798
NZDUSD gave up yesterday’s gains as traders expect the RBNZ will cut rates to 3.50% from 3.75% on April 9.
USDMXN
NY Open: 20.1424, Overnight Range: 19.9056–20.2732
USDMXN is climbing from its overnight low and has reached 20.2555 in early NY trading. The currency is tracking broad US dollar moves.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
Markets closed for Ming Festival
PBoC fix: 7.1889 vs exp. 7.2532 (Prev. 7.1793)
Shanghai Shenzhen 300 closed to 3861.50
China retaliated to Trump’s tariffs by slapping a 34% across the board tariff on US imports while also adding 11 more US companies to its “unreliable list.”
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
