USDCAD: open 1.3890, overnight range 1.3874-1.3985, close 1.3984, WTI 60.55, Gold 3228.34
The Canadian dollar soared as investors world-wide dumped US dollars. Many economists believe that Trump’s global trade war will drive the US into a recession while simultaneously upsetting the global economic order.
The rally can’t last as a US recession is a huge negative for Canada.
The dollar index has cratered nearly 5% since April 1—a move that rivals the COVID-era collapse but in half the time. Gold (XAUUSD) has soared to a record $3,230, and the Swiss franc is up 7.5%. US Treasuries? No longer the safe harbor they used to be. The 10-year yield is holding at 4.41%, after peaking at 4.467%.
China fired back with 125% tariffs on US goods and warned it will ignore any future tariff hikes. It also reminded everyone it holds $760 billion in US debt—plenty of leverage in a brewing economic war. Selling it would be the nuclear option, but even rattling that saber gets attention.
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Trump, meanwhile, can’t stop pulling the tariff trigger. His latest target is Mexico, accusing it of violating the 1944 water treaty and threatening tariffs and sanctions unless it complies. No pause, no pivot—just more economic artillery.
Markets are jittery. The S&P 500 closed down 3.46%. Asia was mixed: China up, Japan’s Topix down 2.85%. Europe gave back early gains, with the DAX down 1.06%. US futures are slightly positive.
EURUSD traded in a 1.1192–1.1473 range, opening at 1.1368. It surged on safe-haven demand but gave background on pre-weekend profit-taking. EU officials are courting China instead of retaliating on the US.
GBPUSD chopped about in a 1.2965–1.3145 range. Sterling peaked on robust UK data but has pared those gains to 1.3091 in NY. Trump’s UK stance remains largely benign—for now.
USDJPY dropped in a 142.07–144.55 band, opening at 142.68. The yen climbed on safe-haven bids despite rising US yields. Trump’s comments about defense spending with Japan may be setting the tone for Japan US bilateral trade talks.
AUDUSD squeezed out gains in a 0.6181–0.6250 range. Widespread US dollar selling kept it afloat, but US-China trade tensions capped gains.
Traders will be watching US PPI and Michigan Consumer Sentiment today, but given the scale of this week’s currency swings, some pre-weekend caution could give the US dollar a modest lift.
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