Risk off – dollar off isn’t exactly a familiar trend in markets, yet this is how things have been playing out in recent sessions. Ultimately, the market is deeply distressed about the outlook for the U.S. economy given the unpredictability of administration policies, forcing investors into risk reduction mode, where alternatives to the U.S. dollar have become the currency of choice, at least for now.
The Canadian dollar is the only notable laggard among developed currencies, with price action reflecting the stress on the Canadian economy as U.S. tariffs take effect and Canada responds with its own retaliatory measures. Mark Carney will step in as Canada’s new Prime Minister and has vowed to keep retaliatory tariffs in place until the U.S. shows Canada more respect.
Earlier today, German industrial production came in better than expected, fueling additional demand for the euro. Looking ahead, there are no first-tier risks on the calendar for the rest of the day, with market focus remaining on broader headlines.
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