The BOC lowered rates by 25% yesterday, but the price didn’t reach 1.45 and we saw a reversal lower after that. The USD/CAD exchange rate has been extremely erratic lately. Nothing is certain at this time because trade negotiations and statements between the US and Canada continue to flow. After the original tariff announcement, USD/CAD jumped beyond 1.45 on Tuesday but eventually gave up its gains, returning to 1.4370 yesterday.
btc-usd
Forex Brief March 13: Can Softer PPI Inflation Boosts Stock Market Sentiment Further?
Skerdian Meta•Thursday, March 13, 2025•3 min read
Today the UK GDP is expected to show a slowdown to 0.1% in January, after a spike to 0.4% in December due to Christmas.
Stock markets performed well as there were no major new tariff developments, despite the US imposing a 25% tax on steel and aluminum imports. In response, Europe and Canada introduced minor duties on US exports, while Trump confirmed upcoming auto and car part tariffs affecting both regions, set to take effect on April 2.
The latest US CPI report showed inflation cooling, with both headline and core CPI rising 0.2% month-over-month, below the 0.3% forecast. Annual headline inflation came in at 3.2%, matching expectations but lower than the previous 3.3%, while core CPI dropped to 3.1%, the lowest level since 2021. The data reinforced expectations for Federal Reserve rate cuts, with market pricing now reflecting 76 basis points of easing in 2025, up from 70 basis points previously.
The Bank of Canada (BoC) also cut rates by 25 basis points to 2.75%, citing concerns over inflationary pressures, slowing growth, and uncertainty caused by US tariffs. This marked the seventh consecutive rate cut, totaling 225 basis points over nine months, making the BoC one of the most aggressive central banks globally.
Despite the BoC’s neutral stance, rising oil prices supported the Canadian dollar, causing USD/CAD to decline. The OPEC report showed an increase in February crude production, but yesterday’s EIA crude oil inventory data revealed a smaller-than-expected build, adding further support to oil prices.
Today’s Market Expectations
Today, Commerce Sec. Lutnick will be meeting with Canadian officials to further discuss USMCA and what the tariff situation might look like. The outcome might give shivers to the markets again, but let’s see.
The headline and core measures of the US PPI producer inflation are expected to be 0.3% when it is issued today. Number-crunchers will be able to see the PCE statistics for February, which are expected to be revealed later this month, thanks to the combination of the CPI and the PPI. A weaker PPIU number today is probably going to further hurt the USD while boosting sentiment in stock markets.
The preliminary University of Michigan (UoM) consumer sentiment index in the U.S. came in at 63.8, down from the previous 64.7, signaling a decline in consumer confidence. Meanwhile, inflation expectations in the preliminary UoM survey remained at 4.3%. Federal Reserve policymakers are closely monitoring these figures, as weakening consumer sentiment raises concerns about economic growth.
Yesterday the volatility in some markets such as equities and cryptocurrencies was pretty high, and we saw a coupe of reversals in forex and commodities such as Gold and crude Oil. That got traders on the wrong foot and we had three losing signals, however we closed 4 winning forex signals as well, after 7 trades during yesterday.
Gold Resumes the Upside Momentum
Gold, which experienced a sharp drop in February, briefly rebounded above $2,900 before pulling back again. Despite struggling to hold new highs, demand for the metal remains strong in both risk-on and risk-off market conditions. Over the past two days, buyers have stepped in near the $2,832 support level, lifting GOLD past $2,915. Yesterday the bullish momentum resumed again, sending XAU to $2,940.
XAU/USD – H4 Chart
USD/CAD Reverses at Resistance After the BOC Rate Cut
USD/CAD – Daily Chart
Cryptocurrency Update
Bitcoin Fails at the 200 Daily SMA
Cryptocurrency markets remained highly volatile, driven by uncertainty over global trade policies and regulations. BITCOIN initially soared to $95,000 following Donald Trump’s announcement that Bitcoin, ETHEREUM , Solana, Ripple (XRP), and Cardano (ADA) would be part of a U.S. cryptocurrency reserve. However, traders remained cautious as they awaited further policy details. Soon after, selling pressure returned, pushing Bitcoin below the 200-day simple moving average (SMA). By Tuesday last week, Bitcoin had fallen to $80,000, breaking through February’s low of $78,500 before staging a recovery but the price didn’t reach $85k as the 200 SMA provided resistance.
BTC/USD – Daily chart
Ripple XRP Tests the 20 Daily SMA
XRP saw a similar pattern of volatility. The cryptocurrency surged 50% after Trump announced Ripple, Solana, and Cardano’s inclusion in the national cryptocurrency reserve. Despite briefly rising above $3, XRP failed to sustain its momentum and dropped back to $2.2150. A broader rebound in risk assets later helped XRP recover to $2.50, but it needs to break above $3 for further upside. If XRP fails to hold above $2.20, renewed buying pressure could send it closer to the $3 mark again, where it faces strong resistance.
XRP/USD – Daily Chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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