Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3610-1.3870
Euro 1.5630-1.5880
Sterling 1.8120-1.8370
WTI Oil (opening level) $98.31
The CAD/USD is opening at 1.3733 ( 0.7282 )
The near-term bias of USD/CAD turns mildly bullish as price rebounds from last week’s lows and pushes back toward the upper half of the recent range, while remaining below the gently descending 100-day EMA near 1.3750, which still caps the broader uptrend. On the daily chart, the Bollinger structure shows spot holding above the middle band around 1.37 and edging toward the upper band near 1.38, signalling recovering upside momentum after a period of compressed volatility.
Initial resistance stands at 1.3750, where the 100-day EMA converges with the upper Bollinger Band, and a daily close above this area would open the way toward 1.3830 and then 1.3900. On the downside, immediate support is at 1.3680 around the middle Bollinger Band, followed by 1.3640, with a break below exposing the lower band and recent floor near 1.3580.
Headlines
· The Bank of Canada kept its overnight rate at 2.25% in March 2026, citing suitable policy amid Middle East conflict-induced energy price volatility. GDP contracted 0.6% in Q4 last year, and CPI inflation is expected to rise due to trade costs and higher energy prices, despite February's 1.8% inflation.
· The Fed maintained the federal funds rate at 3.5%–3.75% at the Wednesday FOMC meeting, citing solid economic activity and elevated inflation amid uncertainty from the Iran conflict. One rate cut is expected this year and another in 2027, no material change from the prior forecasts from December. GDP growth forecasts were raised for 2026 through 2028, while unemployment and inflation projections were slightly adjusted upward. The vote on the decision to keep the rate unchanged was 11-1, with only Stephen Miran dissenting in favour of a cut. Powell stated the Fed won't overlook energy-induced inflation and discussed future rate hikes, though they aren't the base case for most.
· Middle Eastern energy attacks raised fears of global disruptions. Iran targeted a Qatari LNG plant after Israel struck Iran's South Pars field and Qatari authorities cited “extensive damage” after at least one missile was not intercepted. Trump, aware of the Israeli attack, advised against further strikes and waived the Jones Act for 60 days to lower US transport costs.
· The Bank of Japan left its policy rate unchanged at 0.75% as expected, with one hawk dissenting in favour of a 25-bp hike. The statement guided for further tightening if inflation develops as expected and did not change its price forecasts despite the uncertainty from the war in Iran. Short Japanese yields were steady to a basis point higher, suggesting that forward expectations for Bank of Japan tightening remain for a possible hike in either at the April or June meeting followed by a likely further hike later this year. Governor Ueda is out speaking in late Tokyo trading hours Wednesday as this report is being compiled.
· Japan's core machinery orders fell 5.5% to ¥982.4 billion in January 2026, better than the expected 9.6% drop. Manufacturing orders fell 12.5%, while non-manufacturing rose 6.8%. Private-sector orders rose 13.7% annually, exceeding forecasts. These orders are a key indicator of future capital expenditure.
· US producer prices rose 0.7% in February 2026, the largest increase in seven months, surpassing forecasts. Goods prices increased 1.1%, led by a 48.9% rise in vegetable prices. Service prices rose 0.5%, with traveller accommodation up 5.7%. Core PPI rose 0.5%. Annual headline producer inflation hit 3.4%, with core inflation at 3.9%.
Key Points
· Equities: US and Europe fell on oil and rate fears, while Asia rose on chip strength and Korea reform hopes.
· Volatility: VIX elevated, Fed uncertainty, oil-driven inflation risk, event-heavy calendar, protection demand high
· Digital Assets: Crypto tracks macro, ETF flows mixed, IBIT relatively resilient
· Fixed Income: US short treasury yield jump post-FOMC, yield curve flattens. JGB yields calmer awaiting BoJ Governor Ueda presser.
· Currencies: US dollar rises on FOMC and as safe haven as war in Iran intensifies concerns. CHF not serving as a safe haven.
· Commodities: Brent surges while gold, silver and copper slump as Middle East escalation and hawkish Fed unsettle markets