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Forex Today: CAD regains bids on US tariff exemption, Focus shifts to ECB

Forex today witnessed a recovery in risk appetite across Asia, as the White House announced that Canada and Mexico, and possibly other countries, may be exempted from planned Trump’s tariffs on steel and aluminum. As a result, the US dollar found some respite, leaving most majors in tight trading ranges. However, the greenback remained weaker against the export-driven currencies such as the Antipodeans and Canadian dollar. The CAD benefited from the tariff exemption news while the Aussie cheered strong Aus and Chinese trade data. The Kiwi also caught a fresh bid-wave and tested the 0.73 handle following the release of upbeat China’s trade figures.

Towards Asia close, the Yen is seen recovering ground against its American counterpart, closely tracking the retreat in the Nikkei 225 index. Meanwhile, oil and gold prices trade little changed, awaiting fresh impetus from the session ahead.

Main topics in Asia

Japan Q4 GDP revised up to 1.6 pct annualized growth on stronger capex

Japan's economy expanded at an annualized rate of 1.6 percent in the final three months of 2017, revised up from the preliminary estimate of 0.5 percent as the sequential rise in the exports boosted capex plans, the Cabinet Office said on Thursday.

Australia logged a much wider-than-expected trade surplus in January

Australia trade balance swung back into surplus in January, shows the data released by the Australian Burea of Statistics (ABS).  

Trump tariff plan postponed - Axios reporter

US President Donald Trump may not sign the "tariff plan" today, according to Axios reporter Jonathan Swan. 

US steel and aluminum tariffs Will temporarily exempt Canada And Mexico - Washington Post

US President Trump is expected to announce tariffs plan later today, which may exclude Canada and Mexico, according to Washington Post.

China’s Feb trade surplus expands unexpectedly on massive exports surge

China's trade balance for February, in Yuan terms, came in at CNY +224.9 bn vs -68.9 bn expected and +135.8 bn last. 

China’s Feb trade data (USD): Exports jump +44.5%

The China customs published trade balance for Feb in USD terms, reporting a big beat on expectations in the exports numbers, which resulted in the expansion of the trade surplus.  

Key Focus ahead

The main markets moving event for today is expected to be the ECB monetary policy decision followed by the ECB President Draghi’s press conference, where the tone of the statement will be closely eyed for any insights on the interest rates outlook going forward, in the wake of the concerns about inflation and trade war.

In the meantime, the EUR traders gear up for the German factory orders data due to be reported ahead of the Europe open. The NA session sees the releases of the Canadian housing data alongside the usual weekly US jobless claims. Meanwhile, the speech by the BOC Governor Poloz is likely to hog the limelight.

EUR/USD - Bulls in control ahead of the ECB

The EUR's move above the double top neckline of 1.2201 on Mar. 1 trapped bears on the wrong side of the market.

GBP/USD running out of steam trying for more above 1.39

Little data is slated for the UK today, but the GBP/USD can still expect some knock-on volatility when the European Central Bank (ECB) releases their latest Interest Rate Decision at 12:45 GMT.

ECB: Tone of Draghi’s presser to signal QE is less needed – Morgan Stanley

Analysts at Morgan Stanley are out with their thoughts on what to expect from today’s ECB rate decision, followed by the ECB Chief Draghi’s press conference.

ECB and BOJ meetings in focus

Two key central bank meetings take place during a long-overdue return of stock market volatility.

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Mar 05
24h
 
 
Thursday, Mar 08
07:00
 
11.4%
7.2%
07:00
 
-1.6%
3.8%
12:30
 
 
44.653K
12:45
 
-0.4%
-0.4%
12:45
 
0%
0%
13:15
 
216.6K
216.2K
13:30
 
220K
210K
13:30
 
1.910M
1.931M
13:30
 
 
13:30
 
1.3%
4.8%
13:30
 
 
3.3%
13:30
 
0.1%
0.0%
15:30
 
-58B
-78B
16:00
 
 
20:35
 
 
21:45
 
 
3.4%
21:45
 
0.1%
1.4%
23:30
 
0.9%
0.3%
23:30
 
-1.2%
-0.1%
23:50
 
3.3%
3.4%
Friday, Mar 09
00:00
 
0.7%
0.7%
01:30
 
3.8%
4.3%
01:30
 
0.8%
0.6%
01:30
 
2.5%
1.5%
n/a
 
 

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
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