Today's expected range for the Canadian Dollar against the major currencies:
US Dollar 1.3730-1.3980
Euro 1.5830-1.6080
Sterling 1.8310-1.8560
WTI Oil (opening level) $96.11
The CAD/USD is opening at 1.3851 ( 0.7220 )
Iran has rejected a proposed 15-point plan put forward by the United States aimed at ending the conflict, stating that any agreement would be on its own terms and only once its key conditions are met, including security guarantees and recognition of its strategic control over the Strait of Hormuz.
With both sides maintaining a hardline stance, a near-term resolution appears unlikely, raising the risk of a prolonged conflict and broader economic spillover effects.
Oil prices remain volatile and well above pre-conflict levels, raising inflation expectations and complicating the monetary policy path for both the Federal Reserve and the Bank of Canada..
While both the United States and Canada are net Oil exporters and can benefit from higher prices, a sustained rise in Oil can also hurt demand. Higher energy costs reduce consumers' spending power and can slow economic growth.
Policymakers are closely tracking the situation and could be forced to raise rates if higher Oil prices lead to broader and more persistent inflation pressure.
Money markets have shifted their expectations for the Bank of Canada, now pricing in around 75 basis points of rate hikes by year-end 2026, according to published reports earlier this month.
Headlines
· Trump extended the deadline for US attacks on Iran’s energy infrastructure by 10 days claiming talks are going “very well”. Iran allowed 10 tankers through Hormuz and rejected the US plan, proposing its own terms, including control over Hormuz, while the Defense Department according to the WSJ is considering sending 10,000 more troops to the Middle East.
· US initial jobless claims rose by 5,000 to 210,000 in mid-March, meeting expectations but below last year's average. Continuing claims fell by 32,000 to 1,819,000, below expectations, tying the lowest since May 2024. This contrasts with February's weak jobs report. Federal employee claims fell by 59 to 584.
· Global GDP growth is forecast at 2.9% in 2026 and 3.0% in 2027, driven by tech investment and easing tariffs, despite Middle East conflict uncertainty. Inflation for G20 economies is revised to 4.0% in 2026, moderating to 2.7% in 2027. US growth will slow from 2.0% to 1.7%, with inflation peaking at 4.2%. China's growth will ease to 4.4% and 4.3%. The Eurozone will grow 0.8%, recovering to 1.2%, while Japan's growth remains at 0.9%.
· Three Fed officials expressed growing anxiety over the US economic outlook due to the war in the Middle East, with one policymaker saying the spike in oil prices had shifted the balance of risks for now, leaving inflation as a bigger concern than employment. Meanwhile, Stephen Miran stated that reducing the financial system's liquidity demand could enable the central bank to significantly reduce its balance sheet and ease monetary policy.
Key Points
· Equities: Equities fell across regions as Iran headlines lifted oil, revived inflation fears, and hit tech.
· Volatility: Geopolitics, oil risk, VIX elevated
· Digital Assets: Crypto softer, options expiry, ETF outflows
· Fixed Income: A big spike in global yields Thursday on fresh oil price rises, with Japan’s JGB yields hitting new multi-decade highs.
· Currencies: USD strength Thursday eased early Friday, Japan’s finance ministry weighs in against JPY weakness
· Commodities: BCOM showing small weekly loss but large monthly gain; crude steadies near highs; gold rangebound but nervous
· Macro events: Geopolitics, labour resilience, steady global growth, inflation risks, Fed cautious on oil-driven inflation