Geopolitical Shocks That Could Reshape Financial Markets in 2025 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
Bank of Japan Officials Signal Continued Interest Rate Hikes Amid Inflation Concerns 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
ECB Eyes Rate Hike Amid Iran Conflict-Driven Energy Price Surge 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Singapore Tightens Monetary Policy Amid Middle East War Inflation Risks 
RBNZ Holds Rates at 2.25% as Middle East Conflict Fuels Inflation Concerns 
Australia Bans Card Payment Surcharges Starting October 2025 
Bank of Japan Faces Rate Uncertainty Amid Middle East Oil Shock 
Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
The USDCAD longs are adjusted, stopped higher on account of the range-break higher following the BoC’s abandonment of its hiking bias. The new stop could not withstand the torrid drop in US short-end rates that ensued in the wake of two poor US inflation prints leading into the FOMC, even despite Canada printing its fourth monthly contractionary GDP print in the last half year.
Yet with the FOMC pouring cold water on any market hope of an insurance cut, USDCAD has resumed its climb higher and back out of the range in which it was encapsulated since early March. And, with Canada's manufacturing PMI contracting for the first time in three years, we are still biased towards further topside on the pair as the 2Q recovery that the BoC anticipates is already off to a tepid start.
Elsewhere, positive (if misunderstood) headlines this week surrounding USMCA passage prospects appeared to cause a quick but notable knee-jerk move lower in the pair. This would affirm our belief that the market should be increasingly sensitive to news surrounding the fate of the trade pact (and should theoretically be more sensitive to negative news in particular, which we anticipate based on current political signals).
Thus, volatility surrounding USMCA looks set to feature more prominently in the coming weeks and which we feel is biased towards pushing USDCAD higher, leaving us well-positioned with our one-touch USDCAD call option.
Trade updates:
Booked USDCAD longs at 1.3364 at the beginning of March. Squared out at 1.3390 for a profit of 0.31%. Instead, added longs in a 3m USDCAD 1.40 one-touch. Paid 16.70% as part of a calendar spread. Marked at 16.72%. Courtesy: JPM
Currency Strength Index: FxWirePro's hourly CAD spot index is inching towards -22 levels (which is mildly bearish), USD is at 18 (mildly bullish), while articulating (at 13:21 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
