Market Services FX Spotlight

Tariff announcements and a flurry of central bank activity

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The February 2025 edition of Market Services FX Spotlight features global market news and insights from RBC Investor Services' Foreign Exchange (FX) Market Trading Desk.  

Headlines

25% tariffs on Canada and Mexico have kept the CAD and MXN under pressure

Market Services FX Spotlight

  • As expected, the Fed held rates steady at 4.25-4.5%, referencing a lack of progress on inflation and stronger labour market
  • BoC announced an end to quantitative tightening in March and cut rates by 25 bps to 3% 
  • With the disinflation process well underway, the ECB cut 25 bps to a rate of 2.75%
  • USD came off its highs following a decline in yields and a December CPI print that reassured investors inflation was still on its way to 2%
  • The market is currently pricing in 25 bps cuts at the upcoming meetings for the BoE, RBA, and RBNZ
  • Following the resignation of Canadian Prime Minister Justin Trudeau, a leadership race for the Liberal Party has commenced
  • The Brazilian Central Bank, under new chair Gabriel Galipolo, unanimously agreed to raise the benchmark Selic rate by 100 bps to 13.25%
  • The Banco Central de Chile unanimously left their key rate at 5% in their first pause since last July
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FX Market Trading team

 

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