– Canadian Federal election April 28-beware of polls
– US may water down April 2 tariffs.
– USD opens slightly lower across the board on improved risk sentiment.
USDCAD: open 1.4337, overnight range 1.4314-1.4344, close 1.4325, WTI 68.58, Gold 3024.51
The Canadian dollar has a lot going on domestically; weak consumer spending, rising inflation and a federal election called for April 29. On top of it all, President Trump has declared April 2 as “Liberation Day”. That is the day he imposes reciprocal tariffs on all of America’s trading partners. Of course, that’s what Trump said early last week. He changed his tune over the weekend and now the blanket reciprocal tariffs are supposed to be focused and targeted with autos exempted—for now. April 2 is nine days away which leaves a lot of time for changes.
Asian equity indexes were mixed with Japan’s Topix slipping 0.47%, Hong Kong’s Hang Seng climbing 0.51%, and Australia’s ASX 200 finishing flat, up just 0.07%. European markets have a firmer tone. The FTSE 100 and CAC 40 are treading water, while the German DAX has gained 0.16%. S&P 500 futures are up 0.97% but have come off earlier highs. The US 10-year Treasury yield is up 4 basis points to 4.297%, and gold has added $8.00 to its value.
EURUSD traded in a 1.08214–1.0859 band overnight and edged higher despite a generally quiet session. Gains were underpinned by stronger-than-forecast PMI data out of Germany and the Eurozone. German Manufacturing PMI rose to 48.3 from a 47.2 forecast, while the Eurozone figure printed at 48.7 versus expectations of 48. Hamburg Bank’s chief economist highlighted the positive momentum, noting that factory output increased for the first time in a year and that output has been trending upward for three straight months.
GBPUSD climbed in a 1.2896–1.2965 range and pushed above the top of that band in early NY trading. Sterling was lifted by a solid beat in Services PMI (53.2 vs. 51.2 forecast, prior 51.0) and news that Trump may water down his planned tariff measures. Traders are now eyeing Wednesday’s Spring Statement from the UK Chancellor for further cues.
USDJPY rose from 149.31 and 149.96 as it slowly ground higher. Traders were unhappy with the contraction in Jibun’s March Manufacturing PMI (48.3 vs. 49.2 expected) and unwound safe-haven trades on improving sentiment tied to hopes of softer US tariff action. The uptick in US Treasury yields also helped support the dollar.
AUDUSD stayed within a 0.6269–0.6300 range and found some support from risk-friendly sentiment following signs that Trump’s April 2 tariffs might be scaled back. The latest Judo Bank PMI also gave bulls something to cheer about, with the index improving to 51.3 from 50.6 previously.
The US and Canadian data calendars are light.
