– Trump escalates trade with China.
– Global equity markets grinding out gains.
– US dollar opens lower compared to Monday close.
USDCAD: open 1.4198 overnight range 1.4146-1.4246, close 1.4252, WTI 60.82, Gold 3006.90
The Canadian dollar is showing surprising resilience amid the broader volatility in global FX markets. The Loonie is finding some support from the fact that Canada was excluded from Trump’s initial list of countries facing a minimum 10% tariff. That said, the relief may be short-lived—Trump has already slapped unilateral tariffs on Canadian steel, lumber, and aluminum, and another wave could follow if Canada decides to retaliate.
The Bank of Canada’s latest Business Outlook Survey and the Consumer Expectations report didn’t exactly inspire confidence. The BOS indicator slid to -2.14, and one-third of respondents now believe a recession is on the cards this year. Inflation expectations also ticked higher, with 23% of those surveyed anticipating price growth above 3%, up three percentage points from the last report.
WTI crude stayed on the defensive, trading in a 60.18–61.75 band. Mounting worries about a global downturn, combined with Saudi price cuts and higher OPEC output, continue to weigh on oil. Goldman Sachs added fuel to the bearish fire, warning that if growth stalls and OPEC unwinds its production cuts entirely, Brent could slip below $40/barrel by 2026—though they stressed that’s a worst-case scenario, not their base case.
Canada’s Ivey PMI is expected to show some slippage, with forecasts pointing to a dip to 53.3 from 55.3.
Asia’s markets caught a bid overnight, led by a 6.26% surge in Japan’s Topix. Australia’s ASX 200 added 2.27%, and Hong Kong’s Hang Seng rose 1.51%. The rally spilled into Europe, where the UK’s FTSE 1000 gained 1.65% and Germany’s DAX climbed 1.20%. S&P 500 futures are 1.51% higher, while the US 10-year yield sits at 4.18%.
EURUSD traded in a 1.0711–1.0994 band, but met resistance just shy of the 1.1000 level. The gains are limited due to renewed concerns about widening yield spreads in favour of the US. The ECB is expected to cut its benchmark rate cut of 25 bps to 2.25% on April 17, while the Fed is seen holding rates steady.
GBPUSD traded indecisively in a 1.2724–1.2795 range and is struggling to find direction due to a lack of top-tier economic reports. Prices are also supported due to Trump hitting the country with just 10% tariffs while the EU was hit with a 25% levy.
USDJPY chopped about between 146.96 and 148.12 amid a flurry of crosscurrents. Traders are weighing the risk of further BoJ tightening against the growing possibility that the Fed could deliver more rate cuts than previously anticipated, all while markets digest news of 25% US tariffs.
