USDCAD: open 1.4428, overnight range 1.4377-1.4450, close 1.4393, WTI 67.04, Gold 2913.68
The Canadian dollar was volatile and choppy in the past 24 hours, and the ongoing tariff saga suggests more of the same today.
U.S. Commerce Secretary Howard Lutnik fueled the volatility after Ontario Premier Doug Ford threatened to put tariffs on Ontario electricity exports. That would immediately impact 1.5 million Americans—and not in a good way. He took note and claimed that the tariffs were “only a negotiating tactic.” Unfortunately, his boss, Donald Trump, did suggest that in his congressional speech last night. He said, “But we need Mexico and Canada to do much more than they’ve done, and they have to stop the fentanyl and drugs pouring into the U.S.A. They’re going to stop it.”
Global risk sentiment took a turn for the better after Ukraine President Zelenskyy kind of apologized for his actions in the White House. Now there are reports suggesting a U.S./Ukraine mineral deal could be signed as soon as Friday.
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EURUSD traded in a 1.0602-1.0722 range and opened in New York at 1.0698. Optimism surrounding Germany’s defense and infrastructure investment plan, which could enhance German GDP growth by 2% in 2026, has contributed to the rally. Additional upside pressure stems from reports suggesting Zelenskyy is now more open to negotiating a peace deal with the U.S.
GBPUSD climbed in a 1.2768-1.2865 range, fueled by speculation of European stimulus defense spending due to growing concerns over an emerging U.S.-Russia alliance. The pair also benefited from a broader improvement in risk sentiment, which gained further traction after China reaffirmed its 2025 GDP growth target at 5.0%, brushing off the effects of Trump’s trade war. UK PMI data had no material influence on price action.
USDJPY traded in a 149.10-150.18 range. Initial support from a rebound in the U.S. 10-year yield to 4.25% yesterday faded as traders turned their attention to the increasing likelihood of additional Bank of Japan rate hikes in the near term.
AUDUSD rose from 0.6234 to 0.6291 due to optimism following China’s reaffirmed GDP growth forecast. Further support came from an unexpected upside surprise in Q4 GDP, which expanded by 1.3% y/y, surpassing the prior 0.8% reading.
Today’s U.S. data includes Services PMI (forecast 52.6 vs. previous 52.8) and factory orders (forecast 1.6% vs. January -0.9%).
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