- The US trade deficit widened, and US jobs gained 235,000 in ADP data
- The tariff announcement is set for today; some exemptions are expected
- Wall St finished mixed after a whippy session, as oil prices slid
- Today's European Central Bank statement is likely to impact EURUSD
By Michael O’Neill
NY Focus: If “wacky Wednesday” was a day, it would be Wednesday, at least as far as AUDUSD and USDCAD are concerned. The Canadian dollar was the star of the show due to tariff scares and the Bank of Canada policy statement. The BoC did what was expected; left rates unchanged and issued a “cautious" statement.
It was tariff headlines that put the “wacky into Wednesday”. USDCAD
soared from 1.2900 to 1.2999 after the release of the BoC statement because of a report that President Trump would issue a “Presidential Proclamation” on steel
and aluminum tariffs. AUDUSD dropped from 0.7827 to 0.7787.
Then whispers started that Canada and Mexico would be exempt from the action for “national security” reasons. USDCAD tanked and hit 1.2889 just before the close. AUDUSD
rallied to 0.7828.
The flags of the NAFTA nations in Ottawa... talk that Canada and Mexico would be exempt from Trump's tariffs on metals helped CAD bounce back from an earlier tumble. Photo: Shutterstock
EURUSD retreated from the European high on profit-taking and position adjusting ahead of the looming European Central Bank policy meeting. GBPUSD
tested the session lows early and then climbed to close at 1.3902.
rallied from the open, rising from ¥105.46 to ¥106.21 bolstered by the rise in ADP employment numbers and US Treasury yields.
prices slid, undermined by an increase in US crude inventories and concern that US production increases have offset Opec cuts.
The European Central Bank will be the main attraction today. Traders expecting the ECB to announce updated guidance for the quantitative easing program are part of the reason EURUSD
is trading where it is. ECB president Mario Draghi
appeared to push back against such a change in his last speech, when he repeated the need for substantial monetary stimulus.
EURUSD is in an uptrend while prices are above 1.2250. A hawkish ECB statement may test resistance at 1.2550, while a dovish statement will lead to a retest of 1.2250.
Four hour EURUSD chart