The May 2025 edition of Market Services FX Spotlight features global market news and insights from RBC Investor Services’ Foreign Exchange (FX) Market Trading Desk.
Headlines
In the immediate aftermath of “Liberation Day,” most currencies experienced large and relatively orderly moves, unlike equities and bonds, which saw heightened volatility.
—Market Services FX Spotlight
- Markets experienced whiplash after initial reports of smaller reciprocal tariffs were quickly reversed with rates that were worse than predicted. A respite came days later in the form of a 90-day pause for all countries except China.
- US CPI cooled significantly for the month of March with headline year-over-year figures coming in at 2.4%.
- The Bank of Canada held their key rate at 2.75% during their April meeting.
- Fed fund futures see a low probability the Fed cuts rates at the upcoming May 7 meeting.
- China’s retaliatory stance in the face of further US tariffs weighed on LATAM currencies.
- Argentinian assets rallied after the country loosened its grasp on “el cepo” FX controls and announced it would receive USD 15 billion from the IMF.
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