Forex News
Societe Generale economists highlight that Iran‑related energy fallout is pressuring households and growth, with limited fiscal space for large support. They expect the BoE to leave rates unchanged in a unanimous vote this week and to drop its easing bias, as the MPC grapples with uncertainty over the persistence of the current energy shock.
BoE cautious with limited fiscal space
"Last week in the UK, fallout from Iran continued to dominate the news cycle. To counter the rise in heating oil prices, the government announced a £50mn support package, although this is unlikely to have a material effect on CPI."
"Given the risk of another sharp rise in bills in 3Q26 and the cost of living remaining a key concern for voters, the government may be under pressure to prevent large increases in energy bills. However, the £24bn headroom against the stability fiscal rule has already likely been eroded by £7bn due to higher Bank Rate and gilt yields, leaving limited scope to materially increase borrowing, although a one‑off support package that ends before the fiscal target year of FY29–30 may not alter the headroom much."
"This week in the UK, the BoE meeting will likely take centre stage. The key question of how persistent the current energy shock will be means the MPC will be flying as blind as the rest of us."
"Given this uncertainty, we expect the MPC to remain on hold in a unanimous vote, and the easing bias in the guidance is likely to be dropped."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
DBS Group economist Philip Wee highlights that EUR/USD fell 4% to 1.1415 in early March as Iran-related tensions boosted safe-haven Dollar demand. Markets price two ECB hikes in June and September, and unless the ECB pushes back, EUR/USD is expected to find support near 1.1390. The ECB is seen monitoring geopolitics calmly while watching inflation expectations.
Euro pressured but key support eyed
"EUR/USD was pressured during the first half of March, retreating 4% to 1.1415. This correction is primarily due to the geopolitical premium driven by the ongoing conflict in Iran, which prompted a flight to safety into USD. "
"EUR’s trajectory this week hinges on the European Central Bank (ECB) meeting on March 19. Currently, the market is pricing in two 25-bps rate hikes for this year, specifically in June and September."
"Unless the ECB explicitly pushes back against this hawkish pricing, we expect EUR/USD to find support near the pivotal low of 1.1390 on August 1."
"ECB President Christine Lagarde asserted that the governing council will do everything necessary to prevent a repeat of the 2022-23 inflation spiral."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $78.94 per troy ounce, down 2.07% from the $80.60 it cost on Friday.
Silver prices have increased by 11.05% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 78.94 |
1 Gram | 2.54 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 63.16 on Monday, up from 62.27 on Friday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
Nomura economists expect the SNB to keep its policy rate at 0.00% on 19 March and for the foreseeable future. They see low but positive Swiss inflation, resilient GDP growth and rising global energy prices, but highlight Swiss Franc appreciation as a key downside risk to inflation and a trigger for potential FX intervention rather than rate cuts.
Franc strength and energy-driven inflation risks
"We expect the SNB to leave its policy rate on hold at 0.00% at its 19 March meeting. Although CPI inflation is low (it has been 0.1% y-o-y for the past three months), it remains within the SNB’s target range of 0-2%, has printed in line with the SNB’s latest forecast in 2026 so far, and policymakers likely expect it to rise. "
"A key concern for the SNB will be CHF appreciation pressures stemming from the current risk environment, which may encourage FX intervention from the central bank. The SNB said in a statement since the conflict began that “in view of international developments, we are increasingly prepared to intervene in the foreign exchange market”. "
"We therefore believe that FX intervention to stem currency appreciation pressures and their inflationary effects is more likely than a policy rate cut to a negative rate. "
"Indeed, Chairman Schlegel has commented on many occasions that the bar to lowering the policy rate below zero is high and commented in February that negative inflation readings would not cause an immediate alarm, suggesting the SNB is more willing to tolerate some slight deflation than a negative policy rate."
"Further ahead, our central forecast is for the SNB’s policy rate to remain at 0.00% for the foreseeable future, as we believe inflation will accelerate."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Dow Jones futures rise as risk aversion eases on the possible US coalition to escort ships through Hormuz.
- Traders may remain cautious amid possible Middle East escalation after US forces targeted a military site on Kharg Island.
- The US Fed is expected to keep interest rates unchanged on Wednesday.
Dow Jones futures gain 0.33% to trade near 46,750 during European hours ahead of the US regular market open on Monday. S&P 500 and Nasdaq 100 futures rise 0.49% and 0.51% to trade around 6,670 and 24,520 at the time of writing.
US stock futures rise as risk aversion eases on reports that the United States (US) may announce a coalition to escort ships through the Strait of Hormuz. Moreover, US Energy Secretary Chris Wright said that he expects the US-Israel conflict with Iran to end within “the next few weeks,” potentially allowing oil supplies to recover and energy prices to decline.
Wall Street posted losses in the previous session, with the Dow Jones Industrial Average fell 0.26%, the S&P 500 dropped 0.61%, and the Nasdaq 100 lost 0.62%. US markets soared as geopolitical risks weighed on sentiment. Higher energy prices and rising inflationary pressures also reduced expectations that the Federal Reserve will cut interest rates.
Traders are likely to adopt caution amid potential escalation in Middle East tensions after United States (US) forces reportedly targeted every military site on Kharg Island over the weekend, a hub that handles nearly 90% of Iran’s oil exports. Iran has warned it could retaliate against any US-linked oil facilities in the region.
On the Federal Reserve (Fed) policy front, the US central bank is expected to keep interest rates unchanged on Wednesday. Traders will closely monitor policymakers’ guidance for the remainder of the year, particularly regarding inflation risks stemming from the recent surge in energy prices.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
HSBC argues that recent Middle East tensions and “safe haven” demand have lifted the Dollar, helped by short USD covering and tighter US financial conditions. However, the bank notes that 2022-style drivers such as a clearly hawkish Federal Reserve and weak global growth are absent, and expects a de-escalation in geopolitical tensions to see the USD resume softening, barring a hawkish repricing of Fed expectations.
Safe haven gains but softening bias
"At the onset of the latest Middle East conflict, the USD was poised to rise, consistent with a renewed “safe haven” demand and the potential for de-risking – particularly given the build-up of sizeable, short USD positioning since January."
"USD strength has also been accompanied by tighter US financial conditions, which is typically a headwind for other currencies. However, the tightening has been modest relative to previous stress episodes, suggesting that there may be limits to sustained USD outperformance if cross-asset volatility remains contained."
"Unlike 2022, the key pillars that previously underpinned a structurally stronger USD — namely a clearly hawkish Federal Reserve (Fed) and weakening global growth — are not evident. Markets continue to price a bias towards gradual Fed easing this year, and leading indicators point to firmer global growth."
"Together, these factors can support more cyclical currencies and temper broad-based USD strength, reinforcing our central view that a de-escalation in tensions would allow the USD to resume softening. That said, risks remain skewed to the upside for the USD, if the conflict drives a sharp repricing of the Fed path into hiking territory."
"A further downside scenario would be a prolonged conflict that sustains energy and supply-side pressures and revives stagflationary concerns. In such an environment, the USD will likely be stronger than in our base case, supported by the US being less exposed as a net energy importer and by growth cushioning from the One Big Beautiful Bill."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Canadian inflation is expected to rise by 2.1% YoY in February.
- The core CPI is still seen well above the BoC’s 2% target.
- The Canadian Dollar remains on the defensive vs. the US Dollar.
On Monday, attention in Canada will turn to the release of February’s Consumer Price Index (CPI) figures. The data from Statistics Canada will offer the Bank of Canada (BoC) a fresh read on inflation dynamics just ahead of its March 18 meeting, where policymakers are widely expected to leave the policy rate unchanged at 2.25%.
Economists anticipate headline CPI rising by 2.1% YoY in February, still above the BoC’s target but easing from January’s 2.3% annual increase. On a monthly basis, prices are projected to rise 0.4%. Policymakers will also keep a close eye on the core measure, which excludes food and energy, that is set to increase by 2.4% after printing at 2.6% YoY in the opening month of 2026.
Analysts remain uneasy as inflation remains above the BoC’s target, although it has shown some cooling in January. The risk of US tariffs feeding into domestic prices is still seen as adding another layer of uncertainty.
What can we expect from Canada’s inflation rate?
At its latest meeting, the central bank signalled that policy is broadly where it needs to be to keep inflation close to the 2% target, assuming the economy evolves as expected. Still, officials were careful to stress that they are not operating on autopilot. Should the outlook weaken or inflation risks re-emerge, they stand ready to adjust policy accordingly.
When it comes to inflation, the message was cautiously reassuring. Headline price growth is expected to hover around the target, with spare capacity in the economy helping to offset part of the cost pressures linked to ongoing trade reconfiguration. That said, underlying inflation remains somewhat elevated, a reminder that the disinflation process is still incomplete.
Inflation therefore remains the key variable to watch. The latest data showed headline CPI easing to 2.3% YoY in January, while core inflation moderated to 2.6% YoY. The Bank’s preferred gauges, CPI-Common, Trimmed Mean and Median, also softened. However, at 2.7%, 2.4% and 2.5%, respectively, they continue to run above the 2% objective.
When is the Canada CPI data due, and how could it affect USD/CAD?
Markets will turn their full attention to Monday at 12:30 GMT, when Statistics Canada releases its latest inflation figures. There is a noticeable sense of caution ahead of the print, with traders wary that price pressures may prove stickier than expected and keep the broader inflation trend from easing too quickly.
A stronger-than-expected reading would likely revive concerns that tariff-related costs are beginning to filter through to consumers. That scenario could push the Bank of Canada towards a slightly more cautious tone in the near term. It would also tend to offer the Canadian Dollar (CAD) some short-term support, as investors reassess the policy outlook in light of evolving trade tensions and their potential impact on inflation.
Pablo Piovano, Senior Analyst at FXStreet, notes that the Canadian Dollar has surrendered a large portion of its monthly gains in recent sessions, allowing USD/CAD to rebound sharply and approach the 1.3750 area after finding a monthly base near 1.3530.
According to Piovano, a continuation of the renewed bullish momentum could see the pair challenge the March peak at 1.3752 (March 3), followed by the key 200-day SMA near 1.3800. Beyond that, attention would shift to the provisional 100-day SMA around 1.3810, ahead of the 2026 high at 1.3928 (January 16).
On the downside, Piovano highlights initial support at the monthly low of 1.3525 (March 9), followed by the February trough at 1.3504 (February 11) and the 2026 bottom at 1.3481 (January 30).
“In addition, momentum indicators continue to lean modestly bullish. The Relative Strength Index (RSI) is approaching the 59 area, while the Average Directional Index (ADX) near 14 suggests the trend still lacks strong conviction,” he adds.
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
Economic Indicator
Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by Statistics Canada on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.
Read more.Last release: Tue Feb 17, 2026 13:30
Frequency: Monthly
Actual: 2.3%
Consensus: 2.4%
Previous: 2.4%
Source: Statistics Canada
ING’s Warren Patterson and Ewa Manthey report that Aluminium Bahrain has begun a phased shutdown equal to about 19% of its capacity due to Strait of Hormuz disruptions. They argue this underscores structural tightness in Aluminium, with low inventories and constrained supply chains, especially in Europe, likely keeping prices and regional premiums supported as long as Hormuz-related issues persist.
Aluminium market stays structurally tight
"Aluminium Bahrain (Alba) has initiated a phased production shutdown, citing ongoing supply and transit disruptions stemming from the closure of the Strait of Hormuz. The company said it shut three production lines, equivalent to around 19% of its 1.6 million‑tonne‑per‑year capacity, to conserve raw‑material inventories and stabilise operations."
"The curtailment highlights mounting strain on Middle East aluminium supply chains, with shipping disruptions constraining both metal exports and alumina feedstock flows. Coming after Alba’s force majeure declaration earlier this month, and alongside outages elsewhere in the region, the move reinforces tight physical conditions."
"The shutdown reinforces our view that aluminium remains structurally tight, with limited buffers to absorb supply shocks. Beyond supporting outright prices, it should keep regional premiums elevated. This is particularly true in Europe, where low inventories and ongoing stock withdrawals indicate persistent physical tightness."
"As long as Hormuz‑related disruptions persist, any price pullbacks are likely to be shallow, with tight spot availability continuing to underpin both prices and premia."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
A report by Bloomberg showed during European trade on Monday that a key port of Fujairah in the United Arab Emirates (UAE) was hit by a drone, the latest in a series of strikes threatening the country’s only export route outside the Strait of Hormuz.
The report also showed that oil loadings have been halted as a precautionary measure as the damage was being assessed, prompting the fears of global oil supply concerns.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
MUFG’s Senior Currency Analyst Lee Hardman highlights a bullish breakout in the US Dollar index above its 96.000–100.00 range, supported by surging Oil prices after the Strait of Hormuz was effectively closed. MUFG expects the Dollar to stay supported while the blockage persists, as higher energy costs deepen the negative shock to global growth and weigh more heavily on other G10 currencies.
Dollar index holds bullish breakout
"The US dollar has continued to trade at stronger levels overnight after the bullish break out at the end of last week when the dollar index closed above the 96.000 to 100.00 trading range that has been in place since Q2."
"The US dollar continues to derive support from rising energy prices in response to the Middle East conflict."
"Unless supply comes back on stream soon, a higher price of oil will be required to destroy global demand to bring it back into balance with supply thereby reinforcing the negative energy price shock for the global economy."
"Recent developments have added to concerns that even if US military operations in the Middle East were to end soon, there is a high risk that Iran may continue to block the Strait to increase the economic cost which would act as a bigger deterrent for further attacks."
"However, we doubt that hawkish BoE and ECB policy updates will provide much support for the euro and pound against the US dollar given European economies are facing a bigger negative hit than the US economy from the energy price shock."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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