March 10, 2025
- Trump dismisses tariff turmoil as “transitory”
- Powell reiterates that there is no hurry to cut rates.
- USD opens mixed but little changed from Friday.
FX at a Glance
USDCAD: open 1.4355 overnight range 1.4355-1.4392, close 1.4374
Canadians woke up on Sunday to find they lost an hour of sleep and, in the evening, found out they had lost a Prime Minister. The ruling Liberal Party anointed an outsider as Prime Minister of Canada, electing Mark Carney, former Bank of Canada Governor, former Bank of England Governor, and (until he asked to run in the Liberal election) United Nations Envoy for Climate Action and Finance, Vice-Chair and Head of ESG at Brookfield Asset Management, and Chair of Brookfield, and Chair of the Board of Directors at Bloomberg. His predecessor, Justin Trudeau’s resume read “Drama Teacher.”
Mr. Carney won by a massive landslide, securing 86% of the votes, while former Deputy Prime Minister and Finance Minister Chrystia Freeland got a mere 8.0%.
Mark Carney will take the Trudeau and Stephen Guilbeault fixation on Canada saving the entire planet through draconian, economy- and energy-killing policies to unprecedented levels, despite G-7 countries backing away from growth-killing climate change strategies.
And Tariff Man is still chirping. President Trump is threatening to impose a 250% tariff on Canadian dairy (which will do far more harm to Americans than Canadians) today or Tuesday. That is in addition to the 25% steel and aluminum tariffs that start on March 12.
Wednesday is also decision day for the Bank of Canada. Analysts are divided as to whether policymakers leave rates unchanged or cut them by 50 bps.
Canada hosts the G-7 Foreign Ministers in Quebec from March 12-14. The U.S. has already weighed in by demanding the communiqué remove the wording about “sanctions” on Russia.
WTI oil prices traded in a 66.49-67.32 range, with the low occurring following the soft Chinese inflation data. Prices rebounded to Friday’s closing level, but the rally stalled due to rising U.S. recession concerns.
The Canadian and U.S. economic calendars are empty today.
USDCAD Technicals.
The short term USDCAD technicals are bullish following this morning’s break above 1.4400 which hangs a target on the 1.4460 level. The downside has support at 1.4340 and 1.4310
The medium-term outlook is bullish while prices are above the 1.4280-1.4300 zone. The decisive move above 1.4400 targets 1.4550, then 1.4660.
For today, USDCAD support is 1.4360 and 1.4320. Resistance is at 1.4430 and 1.4460
Today’s Range: 1.4360-1.4440
Chart: USDCAD daily
Cheeto in Chief
President Trump—AKA Tariff Man, AKA Cheeto-in-Chief—told Maria Bartiromo of Fox News in response to her comment that CEOs were unhappy with his inconsistent tariff policies that “There is a period of transition because what we’re doing is very big. It takes a little time. It takes a little time.” He went on to say that China thinks in 100-year terms, while Americans are fixated on quarters. His lackey, Commerce Secretary Howard Lutnick, confirmed that steel and aluminum tariffs would be imposed this week, as planned.
Trumps comments have boosted US recession fears with S&P futures dropping 1.41% as of and Dow futures falling over 500 points, as of 8:30 am EDT.
Fed in Park
Fed Chair Jerome Powell was at his ambiguous best when he delivered a speech on Friday. He essentially said that the economy is strong, but risks abound. Inflation is easing, but slowly, so there is no rush to cut rates.
EURUSD
NY Open: 1.0854 Overnight Range: 1.0805-1.0875
EURUSD is consolidating last week’s impressive gains with traders awaiting news on the Russia/Ukraine peace talks that start later this week in Saudi Arabia. EURUSD traders are also looking for news on the government’s massive €800 billion defense spending initiative. Prices got a bit of support after the Sentix Investor Confidence report improved to -2.9 from -12.7.
GBPUSD
NY Open: 1.2912, Overnight Range: 1.2874-1.2948
GBPUSD traded sideways with price action tracking broad US dollar moves. Fed Chair Powell’s comments about not being in a hurry to cut rates helped cap gains supported by Friday’s relatively tame US employment report.
USDJPY
NY Open: 147.25, Overnight Range: 147.09-148.03
USDJPY is trading at the bottom of its overnight range on rising odds for a BoJ rate hike as soon as this month. The view was reinforced today after labor cash earnings data for January rose just 2.8% y/y compared to the forecast for a 3.2% gain. In addition, Trump believes that Japan is deliberately keeping the value of the yen low.
AUDUSD
NY Open: 0.6325, Overnight Range: 0.6296-0.6330
Australian markets were closed Monday, and AUDUSD traded inside Friday’s range. AUDUSD gains were due to broad US dollar selling pressures due to increasing concerns that Trump’s tariff policies will drive the economy into a recession.
NZDUSD
NY Open: 0.5734 Overnight Range: 0.5702-0.5743
NZDUSD drifted higher throughout the overnight session because of a broadly weak US dollar and rising US recession concerns following Trump’s comments about “a transition period” before the benefits of tariffs take hold.
USDMXN
NY Open: 20.2508 Overnight Range: 20.2306-20.3006
USDMXN consolidated last week’s losses due to Trump’s decision to delay tariffs by one month. Mexican President Claudia Sheinbaum attributed Trump’s decision to delay tariffs as a sign of “respect” for her negotiations. She also believes in the Easter Bunny.
BTCUSD
NY Open: 82,709, Overnight Range: 80,240-85,396
Bitcoin traders continue to sell on disappointment about Trump’s strategic bitcoin reserve fund because it will be funded by seized BTCUSD and not new purchases. Traders who bought BTCUSD in anticipation of a post-announcement rally are getting stopped out.
FX high, low, open (as of 6:00 am ET)
China Snapshot
PBoC fix: 7.1733 vs exp. 7.2355 (Prev. 7.1705)
Shanghai Shenzhen CSI 300 rose 1.38% to 3956.24
China CPI fell 0.7% y/y in February (forecast -0.5%, previous 0.5%). PPI fell 2.2% y/y (forecast -2.1%, previous, -2.3%).
China imposed additional tariffs of up to 15% on major U.S. farm exports, including chicken, pork, soybeans, and beef. These tariffs took effect on March 10, 2025, with exemptions for goods already in transit until April 12.
Sources: Yahoo Finance, Oanda, Investing.com,
