To enhance on @Retraut's answer get your passwords in quotes. The accepted answer wouldn't work if you have special characters in your password, which by the way, is good security practice.
[client]
user=root
password="p@$$"
[mysql]
user=root
password="p@$$"
[mysqldump]
user=root
password="p@$$"
[mysqldiff]
user=root
password="p@$$"
http://dev.mysql.com/doc/refman/5.7/en/option-files.html
Search for "Here is a typical user option file:" and see the example they state in there. Good luck, and I hope to save someone else some time.