Apr 04, 2025 (Baystreet.ca via COMTEX) --
- Powell and Payrolls in focus
- Oil price plunge on Opec plan to boost production.
- US dollar rallies from yesterday's NY close-AUD is the worst performing G-10 currency.
USDCAD: open 1.4209, overnight range 1.4054-1.4209, close 1.4097, WTI 64.71, Gold 3091.53
The Canadian dollar rally ran out of gas yesterday afternoon and slid steadily throughout the overnight session. The sell-off continued in early NY trading with the currency weighed down by broad-based US dollar selling pressures.
The Canadian dollar may also be vulnerable after Prime Minister Mark Carney retaliated to the Trump tariffs by slapping levies on US-made cars. Trump won't be thrilled--he previously warned that any retaliation would trigger even higher tariffs.
Canada is expected to have added 12,000 jobs in March, with the unemployment rate ticking up to 6.7% from 6.6%. Any upside surprise will be ignored, while weaker data will simply feed the growing recession risk narrative.
WTI oil prices plunged from $66.90 to $61.77 after eight OPEC members said they'll nearly triple production. Analysts say it's a shot across the bow at quota-cheating cartel members. The selloff was amplified by a softer US dollar and mounting fears of a global recession sparked by Trump's tariffs.
Equity Traders Heading for the Hills
Wall Street closed with its worst losses in five years. The negative sentiment fueled an Asian equity index sell-off, led by a 3.37% slide in Japan's Topix and a 2.44% drop in Australia's ASX 200. European bourses are free-falling. Germany's DAX index is down 4.85%, trailed by a 4.04% drop in the French CAC 40. S&P 500 futures are down 3.4%, pointing to another meltdown on Wall Street. The US 10-year yield is sitting at 3.89%.
Powell and Payrolls
US nonfarm payrolls are expected to show a gain of 135,000 in March, compared to 151,000 in May, while the unemployment rate remains unchanged at 4.1%. The risk is that a weaker-than-expected number, on the heels of Trump's tariffs, will exacerbate the stock market and US dollar slide.
Fed Chair Jerome Powell will attempt to assuage market fears when he delivers an economic outlook at 11:30 a.m. EDT. Yesterday, Fed Vice Chair Harold Patterson and Governor Lisa Cook said there was no hurry to adjust policy and now is the time to be "patient but attentive."
EURUSD traded in a 1.0972-1.1108 range. EURUSD inched higher in Asia, then retreated rapidly in Europe to open just above its session low in New York. The single currency suffered as expectations grew that the ECB will be forced to cut rates at least three more times this year to combat rising recession risk.
GBPUSD traded defensively in a 1.2963-1.3114 range. GBPUSD peaked in Asia and dropped steadily into the New York open. The odds of a 25 bp rate cut at the next BoE meeting in May have jumped to 86%, with at least two more cuts expected.
USDJPY chopped around in a144.56-146.55 range. The pair remains on the defensive, pressured by safe-haven demand for yen and lower US 10-year Treasury yields. BoJ Deputy Governor Shinichi Ueda said the bank would raise rates if reaching its inflation target becomes more likely.
AUDUSD traded in a 0.6051-0.6334 range. With the low being seen in early NY trading.The pair is sensitive to China's fortunes, and Trump's combined 54% tariff levy on Chinese imports will negatively affect Australia's trade with its top partner.
COMTEX_464228283/2559/2025-04-04T09:57:33
