Morning Commentary & Currency Insights – March 2, 2018

Talk of trade wars wreaked havoc on global markets yesterday with the U.S. dollar first spiking on the headlines then plunging against most currencies as market participants view this to be negative for the U.S. in an extremely protectionist maneuver.  While the FED Chair was talking of a smooth running economy with slight tailwinds assisting growth the U.S. President shattered that educated, economically based assessment with a provocative and vague threat to the global economy.  Overseas equity markets are down and North American indices are slated for a decline at the opening bell and gold is higher on safe haven flows.

USD/CAD followed the spike then plummet scenario as well but we have slowly drifted higher as the perception is Canada will be on the losing end of a trade war with our neighbor to the south.  Interestingly, a Presidential tweet suggesting that China is the focus of much of this rhetoric seems to have been ignored by markets so far.  Today’s Canadian GDP is an important number to assess but with all the bluster and chest puffing pushing markets around this number may take a back seat today.  The 1.2910 area still provides decent resistance above and will be pivotal for ongoing moves.