- Trump slaps another 10% tariff on Canada-FX traders yawn
- US/China announce trade deal framework,
- US dollar slides on improved risk sentiment.
USDCAD open: 1.3974 overnight range 1.3970-1.4011, close, 1.3997, WTI 60.86, Gold 4039.41
The Canadian dollar drifted higher helped by improved global risk appetite following signs of easing trade friction between the U.S. and China and expectations for back-to-back 25 bp Fed rate cuts.
Trump added another 10% tariff on Canadian goods after reacting to an Ontario ad that mocked his tariff obsession—claiming even Reagan would call him a muppet. Markets ignored the jab for now, but Trump’s hostility toward Canadian trade could eventually deepen the country’s downturn and weigh heavily on the currency.
WTI oil slid from 62.17 to 60.18 as optimism over a U.S.-China trade framework shifted attention toward a looming global supply glut. Fresh U.S. sanctions on Russian oil producers Lukoil and Rosneft add uncertainty; if they bite, they could help steady prices.
President Trump’s tour of Asia is dominating headlines. He unveiled a series of trade agreements with Cambodia, Vietnam, and Malaysia, though most were recycled versions of earlier announcements. The highlight was the “preliminary framework” outlining the basis for a potential trade deal with China.
US markets are focused on Wednesday’s FOMC meeting. Friday’s inflation data was close enough to forecasts to lock in a 25 bp rate cut, with another move expected on December 10. It’s a busy week for monetary policy updates, with the Bank of Japan and the European Central Bank set to announce decisions on Thursday.
Asian equities rallied on optimism about trade progress and the outlook for another 50 bps in Fed easing by year-end. Japan’s Topix gained 1.70%, Hong Kong’s Hang Seng advanced 1.05%, and Australia’s ASX 200 rose 0.41%. As of 7:10 AM EDT, European indexes were mixed: the CAC-40 -0.14%, FTSE 100 flat, and DAX +0.16%. S&P 500 futures +0.89%, DXY 98.80, 10-year yield 4.03%, gold 4030.55.
EURUSD traded in a 1.1618-1.1648 range, supported by improved risk sentiment. Gains stemmed from hopes of trade progress, rate-cut expectations, and stronger-than-expected German Ifo data showing broad-based optimism across sectors. The ECB is widely expected to hold rates steady on Thursday.
GBPUSD drifted between 1.3310 and 1.3347. The currency’s resilience could delay a BoE cut, though domestic risks remain, including the November 26 budget and renewed chatter of a December policy move.
USDJPY bounced within 152.66-153.26 and remains mid-range in early New York trading. Emperor Naruhito welcomed Trump’s arrival, while new Prime Minister Sanae Takaichi—a fiscal dove pledging higher defense spending—has lowered expectations for a BoJ hike this week.
AUDUSD rose from 0.6513 to 0.6560 after the Asia open on renewed optimism about U.S.-China trade talks. RBA Governor Michele Bullock said inflation and unemployment were “a little too high,” a comment interpreted as a signal that policy will remain unchanged next week.
