Market Moves: USD Slides, Confidence Drops, and AI Deals Gain Focus

14.05.2025

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar 1.3810-1.4040

Euro 1.5530-1.5770

Sterling 1.8460-1.8700

WTI Oil (opening level) $62.97

The CAD/USD is opening at 1.3925 (0.7181)

The USD lost ground after April’s CPI figures came in below forecasts, prompting a shift in market sentiment.

In Canada, consumer confidence continues to weaken. The IPSOS Consumer Confidence Index fell to 47.70 in April from 48.20 in March—the lowest level since July 2024. The decline reflects growing concerns over economic stability amid an ongoing trade dispute with the United States (US), as well as fears surrounding inflation and job security.

Headlines

Both headline and core US CPI for April came in softer than estimates at 0.2% MoM vs. Exp. 0.3% with clothing and new cars showing that companies are not yet passing tariff costs to consumers.
Trump and Mohammed bin Salman, Saudi’s crown prince claim to pledge a total of $1 trillion of investments into the US, though only a cumulative total of $300b of investments was signed at the Riyadh conference. In addition, a USD 9 billion Saudi-US minerals memorandum of understanding was signed, intended to counter China's influence in the region.
The US is considering allowing the UAE to purchase over a million advanced Nvidia chips, while Saudi Arabia collaborates with Nvidia to establish AI factories deploying 6,000 Blackwell GPUs, indicating significant strides in AI development.
JPMorgan Chase & Co. raised its US growth forecast after a temporary US-China trade deal, abandoning its earlier recession prediction for 2025. Chief US Economist Michael Feroli noted that easing tariffs on China lowers recession risk this year, while still considering the risk elevated but below 50%.

Key Points

Equities: US-China tensions ease; Nasdaq rallies; chipmakers outperform; Dow dragged by healthcare
Volatility: VIX futures rise despite equity gains; VVIX higher, indicating potential volatility ahead
Digital assets: Bitcoin consolidates above $100K; Ethereum surges; crypto stocks rally notably
Fixed Income: US 10-year reaches 4.5% amidst broad positive risk sentiment
Currencies: The USD turns lower amid soft CPI and rising risk appetite
Commodities: Crude pauses after four-day gain. Golds haven appeal fades

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