Action Insight Daily Report 3-12-25

Canadian Dollar Volatile on Trade Chaos, Focus Shifts to BoC Cut and US CPI

Canadian Dollar endured a roller-coaster session overnight, initially hitting turbulence after US President Donald Trump threatened to double tariffs on Canadian steel and aluminum imports to 50%. Markets were rattled by the surprise escalation, which was set to take effect within hours. However, the situation shifted after Ontario Premier Doug Ford agreed to suspend a surcharge on electricity exports to the US and scheduled a meeting with US Commerce Secretary Howard Lutnick. Following Trump’s indication that tariffs could be lowered after the talks, the Loonie managed to pare some of its earlier losses.

Despite this temporary relief, uncertainty surrounding tariffs is likely to weigh on business and consumer confidence on both sides of the border. Markets are now increasingly betting that BoC will need to extend its easing cycle to cushion against economic fallout. With a 25bps rate cut widely expected at today’s BoC meeting, traders are now pricing in at least two additional rate cuts by the end of the year. The central bank’s guidance will be critical in shaping expectations for further policy moves, particularly as growth concerns deepen amid trade war disruptions.

Another key event on traders’ radar today is US Consumer Price Index release. Though volatility could spike on the initial headline print, many market participants expect to “look through” the immediate reaction and return to the broader risk-off narrative. Recession worries, fueled by inconsistent trade policies and softer macro data, continue to overshadow the Dollars performance. This environment has generally weighed on the greenback in recent sessions, even though it managed a modest recovery from the steep selloff triggered by intensifying tariff drama....

Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.4370; (P) 1.4445; (R1) 1.4511; More...

USD/CAD retreated ahead of 1.4541 and resistance and intraday bias is turned neutral first. Overall, price actions from 1.4791 high are seen as a corrective pattern, with rebound from 1.4150 as the second leg. On the upside, break of 1.4541 will target 100% projection of 1.4150 to 1.4541 from 1.4238 at 1.4629 and above. But for now, strong resistance is expected from 1.4791 to limit upside to bring the third leg. On the downside, break of 1.4238 will confirm that the third leg has started through 1.4150 support.

EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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