Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3600-1.3850
Euro 1.5740-1.5990
Sterling 1.8240-1.8490
WTI Oil (opening level) $95.98
The CAD/USD is opening at 1.3726 ( 0.7285 )
This week, CAD remained heavily volatile amid the Bank of Canada’s monetary policy announcement on Wednesday, in which it left interest rates unchanged at 2.25%.
Today, investors will focus on the Canadian Retail Sales data for January, which will be published this morning. Month-on-Month Retail Sales are estimated to have grown 1.5% after declining 0.4% in December.
USD had a sharp sell-off on Thursday against the Euro and GBP. The US Dollar Index, was hit hard in the last 24 hours as the US Dollar came under pressure after monetary policy announcements by the Bank of Japan, the Bank of England, and the European Central Bank, in which they delivered a hawkish commentary on the interest rate outlook, which diminished fears of policy divergence with the Federal Reserve.
Headlines
· Energy prices eased after the U.S. and Israel sought to reassure investors unsettled by the latest escalation, in which reciprocal attacks between Israel and Iran damaged key energy infrastructure in the Persian Gulf. Despite the calmer price action, concerns remain that the impact of the conflict will be felt long after hostilities eventually subside. The disruption has already led to an unprecedented supply shock, with producers across the Gulf collectively shutting in around 10 million barrels per day of output. This has intensified global inflation pressures while simultaneously raising concerns about slowing economic growth.
· PM Netanyahu stated Iran lacks the capacity to enrich uranium or make ballistic missiles, sparking optimism for nearing goals and suggesting the war may end soon. However, he noted the continued pursuit of IRGC leaders, indicating the campaign may take time.
· The ECB maintained rates in March 2026 to stabilise inflation at 2%. The Middle East war raises inflation risks and growth uncertainties. Inflation is forecast at 2.6% in 2026, while GDP growth is expected at 0.9% due to the war's impact.
· The Bank of England held the Bank Rate at 3.75% in March 2026 due to rising energy and commodity prices from the Middle East conflict. February's inflation was 0.1%, but CPI could reach 3%-3.5% soon. The MPC monitors potential wage and price effects, ready to adjust policy for stability and growth.
· Swiss National Bank maintained its policy rate at 0% in March 2026, with a 0.25% discount above a threshold for sight deposits. It may intervene in currency markets to prevent Swiss franc appreciation amid Middle East conflict. Inflation rose to 0.1% in February, with forecasts of 0.5% for 2026-2027 and 0.6% for 2028. Rising energy costs and geopolitical tensions increase uncertainty, though Switzerland's GDP rebounded in Q4 and is expected to grow 1% in 2026.
· US new home sales dropped 17.6% to 587,000 units in January 2026, the sharpest decline since 2013 and lowest since 2022, despite low mortgage rates. Aggressive winter storms hindered viewings, affecting sales in the Northeast (-44%), Midwest (-33.9%), West (-21.6%), and South (-8.1%).
· US bank regulators proposed new rules easing large bank capital requirements. The Fed's revised GSIB surcharge would lower the biggest banks' capital by 3.8%, with overall changes reducing capital by 4.8%.
Key Points
· Equities: US losses narrowed as oil eased, while Europe and Asia sold off harder on energy-driven inflation fears.
· Volatility: VIX elevated but easing, triple witching and macro risks keep markets sensitive
· Digital Assets: crypto stabilising, ETF outflows persist, bitcoin resilient, ethereum weaker
· Fixed Income: US treasury yield curve flattens after volatile day. European short yields surge post-ECB
· Currencies: USD weakened sharply Thursday but has bounced. CHF weaker, NOK surging on energy prices.
· Commodities: A volatile week sees strong energy gains offset by long liquidation across previously high-flying metals, including gold, silver and copper