Global risk sentiment continued to sour yesterday as President Trump announced he’d double tariffs on Canadian steel and aluminum to 50%, and later pulled the threat as Ontario suspended a 25% surcharge on electricity exports.
EUR/USD received some extra support yesterday from the news that Ukraine agreed to a 30-day truce with Russia, but has retreated from the 1.095 highs to just under 1.090 as the dollar started to recover and the EU announced €26bn worth of retaliatory tariffs against the US.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, recovers to near 103.55 after bouncing off four-month lows around 103.20.
The USD/MXN pair struggles for a firm intraday direction on Wednesday and oscillates in a narrow trading band, around the 20.2790-20.2795 region through the Asian session.
The USD/JPY rises as trade tensions loom due to back-and-forth tariff rhetoric between Canada and the United States (US), which initially weighed on the US Dollar.
The Mexican Peso holds firm against the US Dollar and fails to gain traction even though the latter refreshes year-to-date (YTD) lows against a basket of six currencies, revealed the US Dollar Index (DXY).
The EUR/USD pair regained bullish traction on Tuesday after the European session, advancing past the 1.0900 zone and continuing its strong upward trend.
Last week we revised up our EUR/USD forecasts significantly mostly on the back of the will of the German coalition-in-waiting to change the country’s debt brake and unleash a substantial amount of fiscal spending, Rabobank's FX analyst Jane Foley notes.
Pound Sterling (GBP) is firmer on the session, with the EUR’s gains still proving the GBP with its essential dynamism, Scotiabank's Chief FX Strategist Shaun Osborne notes.
Spot trading is turning a little choppy on the day as the Euro (EUR) probes the 1.09 area but further EUR gains look likely as investors focus on the massive loosening in Eurozone fiscal policy and the jump in yields that resulted and contrast that with lower yields and growth concerns in the US that is chipping away at the 'US exceptionalism' narrative, Scotiabank's Chief FX Strategist Shaun Osborne notes.
USDCAD struggles to break out of key resistance levels, facing rejection at upper boundaries of trading range. Technical indicators signal potential downside momentum if key support levels are breached. Stay tuned for potential bullish reversal above resistance zones.
Bearish Trade Plan for Crude Oil Futures: Consider a contrarian short at resistance, as dip buyers may take profits after a 2.3% bounce, creating a short-term selling opportunity.
EUR/USD is trading firmer above 1.0900. Germany’s CDU/CSU and SPD coalition are in high-stakes negotiations with the Green party to get the draft debt package passed in the current parliament, BBH FX analysts report.
EUR/USD remains in the low-1.08-1.09 range in a relatively quiet start to the week, Danske Bank's FX analysts Kristoffer Kjær Lomholt and Filip Andersson report.
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