New 15% US Tariffs Trigger Market Turbulence and Renew Dollar Weakness

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

US Dollar        1.3570-1.3820

Euro                1.6010-1.6260

Sterling           1.8340-1.8590

WTI Oil (opening level) $66.62

The CAD/USD is opening at 1.3695 ( 0.7302 )

USD starts off the new week on a muddled note, and moved from its highest level in January as Trump's new global tariffs of 15% triggers a fresh wave of the so-called 'sell America' trade. This acts as a headwind for the USD/CAD pair.

Meanwhile, Crude Oil prices move away from over a six-month high amid concerns about the economic fallout from the trade war and its impact on fuel consumption, which undermines the commodity-linked CAD and acts as a tailwind for spot prices.

From a technical perspective, the USD/CAD pair has been struggling to find acceptance above the 1.3700 mark, and the repeated failures near that level constitute the formation of a bearish double-top pattern on the daily chart. The 200-period Simple Moving Average on the 4-hour chart slopes lower at 1.3718, reinforcing a downside bias. Spot prices hold beneath this gauge, which caps rebounds as dynamic resistance.

Headlines

• After the Supreme Court overruled President Trump’s broadest tariffs, Trump plans to raise global tariffs from 10% to 15% on a new legal basis. Concerns have emerged about potential military action against Iran amid stalled nuclear talks, with negotiations set to resume Thursday in Geneva.
• The US economy grew 1.4% in Q4 2025 according to the first preliminary estimate, far below the 3% forecast, with consumer spending slowing and government spending dropping due to the shutdown. Fixed investment increased. In 2025, the economy expanded 2.2%, down from 2.8% in 2024.
• The US PCE price index rose 0.4% in December 2025, above forecasts, with goods and services prices increasing. Core PCE also climbed 0.4%. Annual PCE inflation hit 2.9%, and core inflation reached 3%, both above expectations. The index is the Fed's preferred inflation gauge.
• The University of Michigan revised US year-ahead inflation expectations slightly down to 3.4% in February 2026, a one-year low, from 3.5%. The five-year outlook was adjusted to 3.3%, matching January's figure.
• Fed’s Hammack emphasized patience with future rate cuts despite inflation progress, citing modestly restrictive policy and economic strength. Logan pointed out tech sector uncertainty and supported steady rates amid job market stability but is unsure about reaching 2% inflation. Musalem endorsed Warsh for Fed chair, mentioned Trump's tariffs won't impact the outlook, and noted Supreme Court ruling might bring uncertainty, with the real FFR around the neutral rate.

Key Points

• Equities: Stocks rose in the US and Europe on tariff headlines, while Hong Kong fell as tech cooled and geopolitics stayed tense.
• Volatility: US futures softer, VIX futures up, tariff uncertainty
• Digital Assets: macro-driven weakness, whale distribution, leveraged liquidations, ETF flows divergence
• Fixed Income: US Treasuries volatile Friday on US Supreme Court ruling on tariffs, yields retreated Monday in early trading.
• Currencies: US dollar weak, JPY broadly stronger after Trump announces new tariffs to replace those overruled by the US Supreme court
• Commodities: Gold and silver rally Monday on top of significant Friday rally.