The Canadian dollar rose in volatile trading as trade war risks first spiked and then eased ahead of the Bank of Canada’s meeting on Wednesday, where policymakers are expected to cut interest rates to shield the economy from the threat of U.S. tariffs.
The Canadian dollar rose 0.4% to 1.4380 against the US dollar after Ontario said it would suspend a 25% surcharge on electricity exports to the United States, hitting a new high for the day. The move prompted US President Donald Trump to say he would reconsider his earlier announcement of doubling tariffs on Canadian steel and aluminum exports.
Tuesday’s trading pushed the Canadian dollar up 0.5% against the US dollar so far in March – still lagging behind all Group of Ten currencies – and left currency watchers to assess the extent of the loonie’s recovery ahead of the Bank of Canada’s March interest rate decision.
Shaun Osborne, chief foreign exchange strategist at Scotiabank, said: “At present, the Canadian dollar may not break through the midline around 1.43. The Bank of Canada is expected to cut interest rates tomorrow, and given the tense trade background, its remarks may be slightly dovish.”
On the European front, BlackRock Inc. has turned negative on eurozone bonds, citing the region’s increased defense spending and limited prospects for further interest rate cuts.
Jean Boivin, head of the investment research institute of the company, and his colleagues wrote in a report on March 10th: “We believe that the yields of sovereign bonds in the Eurozone may rise further and enter a low allocation stage.”
This is a sudden shift by BlackRock, highlighting the significant changes taking place in the market as Germany’s new chancellor, Friedrich Merz, leads the push for increased military and infrastructure spending in Europe. A month ago, the company strategically increased its holdings of the region’s debt amid growing concerns over the European economy due to Donald Trump’s tariff threats.
BlackRock also believes that the European Central Bank’s interest rate cut cycle is coming to an end. It is said that the more hawkish members of the European Central Bank’s governing council tend to pause rate cuts next month to allow sufficient time to consider the impact of a significant increase in defense spending on the economy.
According to swap pricing, the money market believes that the possibility of another 25 basis point rate cut in April is less than 50%. Other investors, including RBC BlueBay Asset Management, are also betting on more losses in the bond market because they think that Germany’s fiscal reforms will cause the European Central Bank to stop cutting interest rates.
BlackRock’s Boivin wrote: “As government borrowing and spending increase, triggering inflation, Europe may face higher interest rates for a longer period of time, just like the United States.”
Technical analysis:
Gold: After regaining the 2900 mark, the price further rebounded to around 2920. Currently, the price is in a consolidation pattern, awaiting guidance from the subsequent CPI data. The key support for the price within the day is around 2900; on the other hand, after refreshing the liquidity below 2890, it may rebound again. Therefore, within the day, one should mainly focus on the long signals in the aforementioned areas. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
The Nasdaq: The subsequent CPI data may continue to trigger adjustments in the Nasdaq, so we maintain the strategy of catching rebounds after refreshing the low point. On the other hand, if today’s CPI unexpectedly drops or shows a moderate performance, then wait for the price to recover above 19700/19750 before capturing long signals. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: The price rebounded as expected, but was once again blocked and fell back above 67. For today, we still focus on buying after a pullback for confirmation. We cannot consider a trend-based move for now. It is recommended to pay attention to the performance of the long signal in the 66-65.50 area. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
At 16:45, ECB President Christine Lagarde will deliver a speech at the ECB and its Watchers Annual Conference.
20:30 U.S. Core CPI (YoY), Unadjusted, February
21:45 Canadian overnight target rate
