Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3550-1.3800
Euro 1.6000-1.6250
Sterling 1.8370-1.8620
WTI Oil (opening level) $91.16
The CAD/USD is opening at 1.3673 ( 0.7314 )
USD keeps heading south against the CAD, reaching three-week lows at 1.3670. The pair is on track for a 1.3% weekly selloff, as hopes that the US and Iran will resume peace talks this weekend are keeping the safe-haven US Dollar under pressure.
News from the Middle East is mixed, but the market keeps focusing on Trump’s positive comments. Trump announced on Thursday a 10-day ceasefire between Lebanon and Israel and affirmed that a deal to end hostilities in Iran is “very close.”
Meanwhile, the Strait of Hormuz remains closed, keeping Crude prices about 35% above pre-war levels. The Governor of the Bank of Canada warned on Thursday about “higher price levels” and highlighted the challenges to keeping inflation anchored without triggering a recession.
In that sense, Canadian Consumer Prices Index figures from March, due on Monday, are expected to validate those fears. Consumer inflation is expected to have accelerated significantly, amid the energy shock triggered by Iran’s war. If the final figures meet the expectations, concerns about stagflation might take a toll on the Canadian Dollar’s strength.
Headlines
· Oil eased in early Friday trade, but the market is still trading on diplomacy headlines rather than calm nerves. Brent near USD 98 and West Texas Intermediate near USD 93 as traders reacted to hopes for weekend US-Iran talks, even though the Strait of Hormuz has been shut for seven weeks and supply disruption remains severe.
· The dollar is heading for a second straight weekly loss as investors unwind some safe-haven positioning. Reuters said the euro and sterling have recovered most of their Iran-war losses, while markets wait for a fresh catalyst from weekend diplomacy.
· The Federal Reserve’s Beige Book says the Iran war is a major source of uncertainty for US firms, complicating hiring, pricing and capital spending decisions. At the same time, weekly jobless claims fell to 207,000, which suggests the labor market is still holding up, even if confidence is not exactly doing cartwheels.
· Central banks are still leaning cautious rather than heroic. Bank of England Governor Andrew Bailey said the Bank is in no rush to raise rates, European Central Bank officials have played down the chance of an April hike, and the International Monetary Fund said its reference scenario still implies about 50 basis points of European Central Bank tightening this year.
· In Japan, Bank of Japan Governor Kazuo Ueda avoided signaling an April rate hike, and Reuters said market pricing for such a move has dropped to around 10%. That keeps the yen and Japan policy outlook firmly in the market conversation.
· The International Monetary Fund also warned European governments not to overuse broad energy support, arguing that blanket subsidies distort price signals and can become very costly, while targeted support for vulnerable households is the better option.
Key Points
· Equities: Global equities extended their rebound as Wall Street hit records, Europe stayed mixed, and Asia rallied on peace hopes.
· Volatility: VIX subdued, geopolitics supportive, Nasdaq streak
· Digital Assets: Selective strength, BTC stable, ETH lagging, IBIT outperforming ETHA
· Fixed Income: Yields steady, limited easing priced
· Currencies: USD stabilising, softer trend, JPY weak
· Commodities: Oil easing, supply tight, gold holding, silver firm, copper consolidates