The Morning Update

Friday March 21st , 2025

Written by:
Bernard Gauvin

As we close out the week, the USD continue to rise while oil prices, equities and bond yield all move lower. President Trump, after staying quiet on Fed policy, is urging the central bank to cut interest rates to support his tariff plans. On Truth Social, he called for rate cuts as tariffs ease, saying, “Do the right thing. April 2nd is Liberation Day in America!!!”

News Headlines. Trump urged the Supreme Court to limit federal judges' power to block his administration's actions nationwide, highlighting ongoing tension with the U.S. judiciary. Zelensky announced US-Ukrainian peace talks in Saudi Arabia next Monday, alongside US-Russia talks. He urged Putin to stop prolonging the war and warned that removing NATO membership for Ukraine would benefit Russia. Russia launched a major drone attack on Odesa, causing fires during the Czech president’s visit. The attack comes as the US pushes for a peace deal and a partial ceasefire to halt strikes on energy infrastructure. Israel warned its Gaza onslaught is "just the beginning" as it intensifies airstrikes and ground operations. However, a full-scale ground war against Hamas may be complicated by waning public support, exhausted reservists, and political challenges. North Korea test-fired a new anti-aircraft missile system, overseen by Kim Jong Un, to assess its performance. The test comes as Pyongyang condemns a U.S.-South Korea military exercise, calling it a rehearsal for invasion.

In currency markets. In Asia, USD/JPY rose 0.4% to 149.39 as the yen weakened, despite stronger-than-expected February inflation data. The BOJ is expected to hike rates in May, with inflation exceeding its 2% target. USD/CNY also edged up 0.08% amid expectations of more stimulus from Beijing. AUD (-0.23%) remained weak on Friday after a sharp drop, following data showing a loss of 52,800 jobs in February, far exceeding expectations of a 30,800-job gain. However, the NZD gained ground (0.17%) against the greenback. Other Asian currencies were mixed, with the INR (0.36%) and MYR (0.15%) gaining against the USD, while the IDR and THB weakened, falling 0.23% and 0.40%, respectively. The USD also gained ground on the ZAR (0.33%) and MXN (0.10%).

In commodity markets. Crude oil prices retraced (0.24%) after yesterday's rally, driven by US sanctions tightening on Iranian oil exports, including targeting Chinese refiner and an oil terminal in China, raising market risks. Meanwhile, OPEC+ outlined output cuts through June 2026, though compliance remains uncertain. Metals hedges lower across the board with gold off 0.44%, silver and copper down 1.3%. In contrast the agricultural commodities, Wheat is up 0.33%, Soybeans 0.05% and Lumber 2.37%.

Current level USD Index                103.976         Up 0.12%

USD/CAD is recovering around 1.4330, supported by safe-haven demand as global trade tensions rise. Fed Chair Powell downplayed tariffs' impact but noted economic uncertainty. US jobless claims rose, and the Philly Fed Survey declined. The Canadian Dollar is pressured by political uncertainty and concerns over a snap election.

Current level USD/CAD                   1.4330            down 0.05%

EUR/CAD is ending the week on a down note, retracing 0.15% today, though it remains up over 4% for the past month.

Current level EUR/CAD                   1.5529            Down 0.10%

EUR/USD is trading near a 10-day low as the USD following the Fed’s stance against interest rate cuts. Fed Chair Powell emphasized that the central bank won’t rush to cut rates due to economic uncertainty, noting potential inflation risks from new policies under President Trump.

Current level EUR/USD                   1.0830            Down 0.19%

GBP/EUR is recovering, though the GBP strengthens after the BoE held rates at 4.5% and signaled fewer rate cuts than expected.

Current level GBP/EUR       1.1949 (0.8361)         Up 0.03%

GBP/USD remains range-bound around, influenced by USD strength from the Fed’s rate cut forecast and inflation outlook. Geopolitical tensions and US tariff concerns weigh on the pair.

Current level GBP/USD                   1.2938          Down 0.22%