March 17, 2025
- US retail sales rise less than expected.
- China’s 30-point action plan improved risk sentiment in Asia
- USD weighed down by recession fears.
FX at a Glance
USDCAD: open 1.4356, overnight range 1.4342-1.4383, close 1.4368
USDCAD is consolidating Friday’s losses, which tracked the rebound of Wall Street equities. Traders moved past last week’s highly anticipated BoC rate cut to 2.75% and remain concerned about how Trump’s tariffs will impact the Canadian economy. That makes Tuesday’s CPI report more important. The end of the government’s GST/HST tax holiday is expected to boost CPI to 2.1% y/y from 1.9%. The result will be well within the BoC target of 1-3%, but the upward direction may lead to speculation of a slower pace of rate cuts
Mr. Carney is dancing a jig (he just renounced or is renouncing his Irish passport) in honor of St. Patrick’s Day and his ascension to Prime Minister, despite not having a seat in Parliament. Mr. Carney is in Europe to bolster trade and security ties with France and Europe.
WTI oil prices rallied from Friday’s low of 66.60 to 68.10 on Red Sea supply disruption fears after the US launched attacks on Houthi rebels in retaliation for missile and drone strikes on commercial shipping
USDCAD
The short-term technical outlook is bearish with the MACD signalling further downside pressure. However, the RSI suggest that in the short term USDCAD is oversold which suggests a bounce before the downtrend resumes—assuming the bounce stalls at 1.4400. If so, it would negate the negative pressure and shift the focus to 1.4460.
Longer term, USDCAD remains in the rising wedge pattern and is looking for a break above 1.4450 to extend gains to 1.4550. A move below 1.4350 targets 1.4300 then 1.4250.
For today, USDCAD support is 1.4340 and 1.4310. Resistance is at 1.4380 and 1.4420.
Today’s Range: 1.4310-1.4380
Chart: USDCAD daily
“What, Me Worry?”
Mad Magazine’s Alfred E. Neuman and US Treasury Secretary Scott Bessent share the same view—why worry? Mr. Bessent said he was “not worried about the markets” despite the multi-trillions of dollars that vanished from equities last week. “Corrections are healthy, they are normal.” He is also on board with Trump’s tariff plans, as evidenced by his comment that “the American Dream isn’t contingent on being able to buy cheap goods from China.”
“Call Me Maybe”
President Trump said he would be speaking to Putin to discuss an end to the war in Ukraine on Tuesday. The issue is how much of Ukraine will be ceded to Russia. Ukraine President Zelensky is not really part of the talks. He will be forced to accept whatever Trump decides.
Are American Consumers Shopping?
Yes, the American consumer is still buying but not as much as before. US Retail Sales rebounded in February, rising 0.2% from the -0.9 drop in January. The forecast was for a gain of 0.7% m/m which suggests Trumps tariff war has sapped confidence and encouraged savings.
EURUSD
NY Open: 1.0903, Overnight Range: 1.0869-1.0912
EURUSD inched higher ahead of tomorrow’s German vote on the €500 billion defense and infrastructure spending plans. Prices are also underpinned by increased hopes that Tuesday’s Trump/Putin call will lead to a ceasefire. ECB policymaker Luis de Guindos said Trump’s tariff policy has made it difficult to determine future rate decisions.
GBPUSD
NY Open: 1.2955, Overnight Range: 1.2925-1.2978
GBPUSD recovered Friday’s losses and climbed steadily overnight. Prices are bolstered by broad US dollar weakness and speculation that the BoE will leave rates unchanged at Thursday’s meeting.
USDJPY
NY Open: 148.65, Overnight Range: 148.46-149.10
USDJPY traded with a bullish bias in Asia but faded the move in Europe. Prices are supported because, although analysts are expecting two BoJ rate hikes in 2025, rates will be left unchanged Wednesday.
AUDUSD
NY Open: 0.6348, Overnight Range: 0.6321-0.6349
AUDUSD is trading at the top of its overnight range, supported by better-than-expected Chinese Retail Sales and Industrial Production data. In addition, hopes that the latest Chinese stimulus plan will lift China’s economy—and by default, increase demand for Australian exports—are also underpinning prices.
NZDUSD
NY Open: 0.5780, Overnight Range: 0.5744-0.5780
Kiwi is trading with a bid due to better-than-expected Chinese data and US dollar weakness from rising American recession fears.
USDMXN
NY Open: 19.9149, Overnight Range: 19.9091-19.9601
USDMXN traded sideways overnight after falling Friday, which is a rather impressive performance in the face of Trump’s tariff plans. The USDMXN retreat was due in part to favorable comments by US officials about Mexico’s pragmatic response to tariffs. The pragmatism stems from both the UK and Mexico refraining from tariff retaliation.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.1688 vs exp. 7.2199 (Prev. 7.1738)
Shanghai Shenzhen CSI 300 fell 0.24%% to 3996.79
China Retail Sale rise 4.0% y/y in February.
Industrial Production rose 5.6% y/y in Feb (forecast 5.3%).
China unveils 30-point plan to boost consumption. It includes measures to increase incomes, stabilize markets including the housing market, and encouraging consumer spending.
Sources: Yahoo Finance, Oanda, Investing.com,
