1326 GMT – The Canadian dollar and Mexican peso look vulnerable given market optimism of a further delay to U.S. tariffs against Canada and Mexico, ING analyst Francesco Pesole says in a note. U.S. Commerce Secretary Howard Lutnick confirmed Sunday the tariffs would take effect Tuesday after an initial one-month delay, although President Trump would determine whether to implement the planned 25% level. The market is still leaning towards another delay so there appears to be “more downside risks than upside risks” for the Canadian dollar and peso, Pesole says. “We’ll be looking for moves above [USD/CAD] 1.460 and [USD/MXN] 21.0 as key indicators of a pessimistic shift in sentiment.” USD/CAD falls 0.1% to 1.4433. USD/MXN drops 0.3% to 20.4795. (
[email protected])Euro Could Rise if ECB Signals Pause in Rate Cuts, Tariffs Pose a Risk
1321 GMT – The euro could rise briefly if the European Central Bank signals it could pause interest-rate cuts after a highly anticipated 25 basis-point cut Thursday, Rabobank forex strategist Jane Foley says in a note. The ECB could it indicate that it will pause policy easing until June, she says. This would provide the euro with some short-term relief. “This, however, could be blown away if President Trump is forthcoming with a tariff announcement with respect to the EU.” For this reason, Rabobank continues to see the risk of the euro falling to parity against the dollar by mid-year. The euro rises 0.7% to $1.0473. ([email protected])
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