April 3, 2025
- Wall Street tanks in after hours trading-global indexes follow suit.
- Tariff fall-out and ISM Services PMI will guide trading today.
- US dollar plunges in the wake of Trump’s wealth building exercise.
FX at a Glance
USDCAD: open 1.4125, overnight range 1.4113-1.4319, close 1.4236
The Canadian dollar appears to have dodged a bazooka blast. President Trump actually honoured the USMCA agreement on trade, which he called the “largest, fairest, most balanced, and modern trade agreement ever achieved.” Canada was not hit with any new tariffs but still faces a 25% levy on non-compliant USMCA goods. Non-compliant energy products and potash tariffs are reduced to 10%.
That is not written in stone—more like tissue paper—which will be tested if Carney doesn’t flip-flop on his vow to respond to Trump’s tariffs with “purpose and with force.” Trump doesn’t like being challenged. Even so, USDCAD could fall another 150 points before it finds a bottom but additional losses may be hard to come by as the existing tariffs on steel, aluminum, lumber and potash, will drag the domestic economy down.
USDCAD is under pressure due to widespread selling as investors sell stocks and bail out of the US on fears that Trump’s tariff policies will drive America into a recession. Trump is okay with that, especially since he and his family will not even notice it.
Canada’s Trade surplus turned into a $1.5 billion deficit in February. US Challenger Job cuts rose to 275,200 from 172,400 in February.
US weekly jobless claims rose 219,000 , 6,000 less than expected.
USDCAD Technicals
The intraday USDCAD technicals turned bearish after prices broke below support at 1.4290 and again at 1.4210 and are looking to extend losses to 1.4030. The bearish sentiment is confirmed by the MACD, while RSI suggests the currency pair is not oversold yet.
The medium-term technicals are also bearish and pointing to further losses to the 1.3960 area (61.8% Fibonacci retracement level of the September–February range).
For today, USDCAD support is1.4070 and 1.4020. Resistance is at 1.4170 and 1.4240.
Today’s Range: 1.4070–1.4170
Chart: USDCAD 1 day
No More Mr Rich Guy
President Trump liberated American investors from the shackles of wealth creation. With a stroke of his pen, and after about 45 minutes of bombastic, hyperbolic remarks, Trump erased trillions of dollars of American wealth. S&P 500 futures are down 3.26%, NASDAQ futures are down 3.68%, and Dow futures have lost 2.63% in early NY trading. Apple (AAPL:NASDAQ), the company that promised to spend $500 billion in new factories in the US, is down 7.0%.
He imposed a minimum 10% tariff on all imports into the US and tariffs as high as 48% for Laos, 47% for Madagascar, and 46% for Malaysia. China got hit with another 34% levy on top of the existing 20%.
Global Investors Get Hammered
Trump’s actions trashed Asian equity indexes. Japan’s Topix plummeted 3.08%, Hong Kong’s Hang Seng lost 1.52%, and Australia’s ASX 200 fell 0.94%. European bourses are in just as bad shape. The French CAC 40 index lost 2.45% while the German DAX fell 1.92%. The UK FTSE 100 index is down 1.33% (as of 6:00 AM EDT). The 10-year Treasury yield dropped from yesterday’s peak of 4.20% to 4.033% overnight, and it sits at 4.06% in NY.
US Dollar Index (DXY)
The US dollar index lost 2.37% as investors bailed out of US stocks and sold the proceeds. Trump wanted a weaker dollar, and he is getting it.
GBPUSD
NY Open: 1.3177, Overnight Range: 1.2974-1.3207
GBPUSD is on a tear powered by news that Trump levied his minimum 10% tariff on the UK, 50% less than what the EU faces. Chalk up one for Brexit. Prices are also supported by steady UK Services PMI (actual 52.5, previous 53.2).
USDJPY
NY Open: 146.32, Overnight Range: 146.26-149.31
USDJPY is trading at its overnight session low in NY. Broad-based US dollar weakness combined with safe-haven demand for yen and plunging US Treasury yields fueled the selling. Japanese Prime Minister Shigeru Ishiba said he was “disappointed” after Trump slapped a 24% tariff on his country’s exports, and he is hoping to talk to Trump to get a reprieve.
AUDUSD
NY Open: 0.6354, Overnight Range: 0.6226-0.6360
AUDUSD rallied, partly because Trump only hit Australia with a 10% tariff. However, the bulk of the gains were due to the widespread US dollar selling pressure as investors fear Trump’s tariffs will be very damaging to the US economy. However, further gains may be limited due to the total of 54% tariffs on Chinese imports to the US.
NZDUSD
NY Open: 0.5810, Overnight Range: 0.5682-0.5825
NZDUSD is at the top of its overnight range for all the same reasons AUDUSD rallied.
USDMXN
NY Open: 20.1044, Overnight Range: 20.0197-20.3403
USDMXN dodged a tariff bullet after Trump said he would adhere to the USMCA agreement on trade. However, the previously announced tariffs remain in place.
FX high, low, open (as of 6:00 am ET)
China Snapshot`
PBoC fix: 7.1889 vs exp. 7.2532 (Prev. 7.1793)
Shanghai Shenzhen 300 fell 0.59% to 3861.50
Chinese March Caixin Services PMI 51.9 vs. Exp. 51.5 (Prev. 51.4) Caixin Composite PMI 51.8 (Prev. 51.5)
Trump levied a 34% reciprocal tariff on top of existing 20% tariffs for a total of 54%. China reacted calmly. The Commerce Ministry accused the US of unilateral bullying and vowed to take “resolute countermeasures.
Sources: Yahoo Finance, Oanda, Investing.com, Bloomberg.
