- March 7, 2025
- Posted by: Melanie Scott
- Category: Market News
After a rollercoaster week of tariff developments, President Trump announced yesterday another pause on tariffs for Canadian goods, pushing the effective date to April 2nd. This decision followed the brief implementation earlier in the week of a 25% fee on Canadian exports, which was swiftly met with retaliatory measures on tens of billions of dollars worth of U.S. goods. In response, Trump threatened additional tariffs before agreeing to exempt automakers from the fee for one month, contingent on their compliance with the Canada-U.S.-Mexico free trade agreement. He also signaled willingness to extend similar relief to other products. By the time the new April 2nd date was announced, the market’s primary takeaway was clear: regardless of how long the tariffs last, businesses will live in lingering chaos and uncertainty with ever-shifting goalposts throughout Trump’s presidency.
Canada’s employment was virtually unchanged in February, adding just 1.1k jobs following January’s robust 76k gain. This modest gain was enough to hold unemployment rate steady at 6.6%, though the quality of job growth disappointed—19.7k full-time jobs were lost, offset only by 20.8k part-time positions. Job gains were led by wholesale and retail trade, along with finance, insurance, and real estate sectors. Meanwhile, industrial capacity utilization rose to 79.8% in Q4 2024 from 79.4% in Q3, driven largely by growth in construction and petroleum and coal product manufacturing.
In the U.S., average hourly earnings rose 0.3% in line with expectations, though slightly lower than January’s 0.4%. The unemployment rate edged up to 4.1% from 4.0%, against expectations of an unchanged reading. Non-farm payrolls increased by 151k, falling short of the 159k forecast but improving on January’s 125k. Market sentiment remains clouded by uncertainty surrounding tariffs, a potential trade war, federal workforce purges, and deportation actions. The USD has recovered more than yesterday’s losses against the CAD, currently up 0.60% from yesterday’s close.
In Europe, employment rose 0.1% quarter-over-quarter, while inflation-adjusted GDP showed a modest 0.2% increase. The ECB delivered a widely expected 25bps rate cut yesterday, lowering rates from 2.90% to 2.65%. Markets are pricing in another cut in April, with the threat of possible U.S. tariffs adding to the region’s fragile economic outlook.
Navigating currency risks is crucial to long-term success—contact Bendix to discover a proactive, tailored approach to your FX needs.