Mar 31, 2025 (Baystreet.ca via COMTEX) --
- Risk aversion soars as tariff day nears
- Economic data takes a back seat to headlines.
- US dollar opens broadly mixed-Safe-haven currencies gain
USDCAD: open 1.4353, overnight range 1.4276-1.4362, close 1.4320, WTI 69.51, Gold 3114.57
The Canadian dollar dropped on the back of rising risk aversion sentiment which roiled markets worldwide. Canadian dollar price action is driven by events in the US with domestic data, and election news not being a factor.
President Trump was speakign and his tariff message was muddled. Last week he talked that the tariffs that would be imposed would likely be lower than expected. He must have had a change of heart on the weekend when he said that tariffs may be much higher. Then he took aim at Russia and said that if they didn't start working on a ceasefire, he would slap tariffs on every country that does business with them.
Wall Street stumbled into the weekend with losses, and the downturn deepened across Asian markets overnight. Trump's tariff rhetoric rattled investor nerves, dragging Australia's ASX 200 down 1.74% and slicing 3.57% off Japan's Topix. European equities weren't spared either, with the German DAX falling 1.82% and the FTSE 100 shedding 1.17%. US equity futures are pointing lower, with S&P 500 contracts off 0.88%. Meanwhile, the flight to safety lifted gold (XAUUSD) to 3127.88 from Friday's low of 3054.75. The 10-year Treasury yield plunged to 4.178% from 4.36%, and the US dollar index remains comfortably mid-range between 103.42 and 103.83, even as haven demand boosts the yen, Swiss franc, and euro
EURUSD traded in a 1.0764-1.0850 range and opened in New York at 1.0816. The single currency held firm despite sharp losses in Eurozone equities and renewed tariff threats from Trump. Investors overlooked regional data, instead focusing on headlines out of France where Marine Le Pen was convicted of embezzlement and barred from public office. Broader concerns about a US slowdown underpinned demand for EURUSD.
GBPUSD moved within a 1.2921-1.2973 band and began the NY session at 1.2927. Sterling surrendered earlier gains as traders looked past reports of "productive discussions" between UK Prime Minister Starmer and Donald Trump. Market reaction remained focused on geopolitical tension and tariff risks, with UK economic indicators largely ignored.
USDJPY fell through a 148.71-151.22 range and started the day at 149.24 in New York. The yen strengthened on safe-haven flows sparked by sinking US Treasury yields and heightened tariff rhetoric. The pair also faced headwinds from speculation that the Bank of Japan may soon lift interest rates. Japan's economy stands vulnerable to US auto tariff threats.
AUDUSD traded between 0.6249 and 0.6314 overnight and opened NY at 0.6250. The Aussie struggled under pressure from AUDJPY selling and growing concerns that Trump's tariff agenda could derail China's fragile recovery. The risk-off mood kept sentiment bearish throughout the session.
The US and Canadian economic data calendars are empty.
COMTEX_464110517/2559/2025-03-31T12:12:25
