- Risk aversion sentiment weighing on Loonie
- Trump speech and Fed speakers in the spotlight today
- US dollar trading with a bid.
USDCAD open: 1.3704, overnight range 1.3692-1.3718, close 1.3698, WTI 66.25, Gold 5173.38
The Canadian dollar is drifting lower in early NY due to renewed risk aversion sentiment after yesterday’s equity market sell-off on Wall Street. A spate of soft domestic economic data in the past week and a lack of US economic data today is underpinning the currency pair.
WTI oil prices are steady in a 66.08-66.96 range with traders awaiting news from Thursday’s Iran and US nuclear talks.
The Supreme Court decision that IEEPA tariffs were illegal resulted in Trump announcing a 15% levy which today is 10% rate. However, the tariff rate will “likely rise to 15%” soon. Democrats have tabled legislation compelling the administration to reimburse all tariff proceeds deemed unlawful, plus interest, within 180 days.
Adding to the unease, Nassim Taleb cautioned that investors are discounting deep structural risks while placing too much faith in the staying power of the AI-driven surge. That warning rattled Wall Street and lent fresh support to the US dollar.
A parade of Fed speakers will outline their monetary policy views today, including Chicago Fed President Austan Goolsbee, Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, and Governors Christopher Waller and Lisa Cook.
The headline act is Trump’s prime-time address, rebranded here as the “Look How Great I Am” speech. Expect abundant bravado, limited detail, and selective interpretations of reality.
Equity markets in Asia ended mixed. The Shanghai Shenzhen CSI 300 gained 1.01% as China resumed trading after the Lunar New Year break. Hong Kong slid 1.81% amid fallout from US tech-sector weakness tied to AI disruption concerns. Japan’s Topix added 0.20%, and Australia’s ASX 200 finished unchanged.
As of 7:30 a.m., the CAC-40, FTSE 100, and DAX are dancing around unchanged while S&P 500 futures are up 0.15%. The US Dollar Index is 97.92, and the 10-year Treasury yield is 4.033%.
EURUSD traded in a 1.1768-1.1797 band, pressured by renewed friction between Washington and Brussels. European officials regard the latest 10% tariff move as a breach of the existing trade deal and have paused ratification efforts.
GBPUSD was uneventful in a 1.3470-1.3506 range. Market participants are watching parliamentary testimony from Bank of England officials for guidance on the March rate decision while assessing the implications of the new tariff regime.
USDJPY advanced sharply from 154.66 to 156.28. The move followed reports that Prime Minister Sanae Takaichi voiced reservations about further rate increases during discussions with BoJ Governor Kazuo Ueda. Although unconfirmed, the report complicates the policy narrative.
AUDUSD traded sideways in a 0.7048 and 0.7074. Support stems from Australia’s relatively firm policy rate of 3.85% and expectations of additional tightening. That outlook could shift if inflation data cools as forecast, with projections at 3.7% compared with 3.8% previously.
