The US dollar tumbles as tariffs shake market confidence.

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.4000-1.4200

Euro                 1.5530-1.5750

Sterling            1.8440-1.8670

WTI Oil (opening level) $67.27

The CAD/USD is opening at 1.4092 ( 0.7096 )

The blitz of new tariffs from US President Trump were harsher than expected and drove a drop in the US dollar, strong rise in the Japanese yen, a fall in US treasury yields and a significant risk-off in equity markets.

The CAD has broken through the 100 day moving average and is now seeking new lows.

Headlines

·    US President Trump unveiled a barrage of new tariffs on imports from US trading partners, starting with a baseline tariff percentage of 10%, but with differentiated reciprocal tariffs against most major US trading partners, including 34% tariff on China (This apparently on top of the 20% already announced), 24% on Japan, 20% on the EU, 31% on Switzerland and 10% on the UK (the baseline). The new baseline tariff of 10% will go into effect on April 5, with the reciprocal tariffs set for April 9. The market now awaits potential retaliatory measures from countries impacted by these tariffs.

·    ECB executive board member Isabel Schnabel, a German, spoke yesterday in favour of greater issuance of joint debt in the Euro area to boost the single euro currency’s role in the global economy. The euro responded strongly across the board yesterday before new US tariff announcements partially derailed its strength against other currencies, although it is still stronger versus the US dollar.

·    According to the US March ADP Employment Change survey, the US private sector added 155K jobs, exceeding expectations. The services sector gained 132K jobs, while trade/transportation/utilities lost 6K. The goods-producing sector added 24K jobs, but natural resources/mining lost 3K. Pay gains slowed to 4.6% for job-stayers and 6.5% for job-changers.

Key Points

·    Equities: Trump tariffs trigger global equity selloff; Europe, Asia hit hard; autos, tech under pressure

·    Volatility: VIX futures surge +16.8%; curve inverts; tariffs main risk driver

·    Digital Assets: BTC +0.95%; $500M liquidations reversed; crypto stocks rebound; VanEck eyes BNB ETF

·    Currencies: USD weaker, JPY spikes higher in reaction to Trump tariff blitz

·    Fixed Income: US yields push to new cycle lows after Trump tariff blitz

·    Commodities: Cotton, crude and copper lead the slump on growth concerns, gold holds steady on haven demand