Forex News
Rabobank’s FX Strategy team argues the Dollar’s safe haven role has been confirmed by recent Middle East tensions and associated market stress. The bank highlights the USD’s dominant share in global FX turnover and reserves, and expects reduced reluctance to hold long Dollar positions as fears of a structural decline in the currency fade.
Dollar strength backed by liquidity and flows
"The uncertainties of the past fortnight have provided a definitive conclusion to last year’s debate over whether the USD had lost its safe haven quality after the April 2025 plunge triggered by the US Administration’s tariff announcements. It has remained our view that the USD’s unmatched liquidity meant that its safe haven status was assured. From investors’ point of view, the need for liquidity will always trump returns in a crisis."
"Last year’s BIS triennial FX report indicated that the USD was on one side of 89.2% of trades, slightly higher than in the previous report and significantly above the levels of any other currencies. This reflects the dominance of the greenback as a global transaction currency and its widespread use in payments systems and supply chains."
"The USD remained relatively stable in H2 last year and, having now proven that it remains a safe haven, we would expect fears that it has entered into a period of long-term decline will abate. This suggests that the market’s reluctance to hold long USD positions may subside."
"For the remainder of this year, the USD will still face uncertainties as to how the Fed will reconcile political pressure to ease with the inflation impulses triggered by the closure of the Strait of Hormuz. Around the world higher energy and fertilizer costs will impact various parts of the supply chain including distribution and processing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Statistics Canada reported that the Unemployment Rate rose to 6.7% in February, surpassing the 6.5% posted in January and the expected 6.6%. Net Change in Employment showed the economy lost 83.9K jobs, much worse than the 10K increase anticipated, while the Participation Rate eased to 64.9% from 65%.
The same report shows that Average Hourly Wages were up 3.9% year-over-year in February, following a 3.3% increase in January.
Market reaction
The Canadian Dollar (CAD) came under strong selling pressure, with USD/CAD nearing 1.3700 as an immediate reaction to the news.
Canadian Dollar Price Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.34% | 0.55% | 0.00% | 0.36% | 0.38% | 0.42% | 0.12% | |
| EUR | -0.34% | 0.21% | -0.35% | 0.02% | 0.03% | 0.07% | -0.23% | |
| GBP | -0.55% | -0.21% | -0.55% | -0.19% | -0.17% | -0.15% | -0.43% | |
| JPY | 0.00% | 0.35% | 0.55% | 0.38% | 0.39% | 0.41% | 0.13% | |
| CAD | -0.36% | -0.02% | 0.19% | -0.38% | 0.00% | 0.03% | -0.25% | |
| AUD | -0.38% | -0.03% | 0.17% | -0.39% | -0.00% | 0.03% | -0.28% | |
| NZD | -0.42% | -0.07% | 0.15% | -0.41% | -0.03% | -0.03% | -0.29% | |
| CHF | -0.12% | 0.23% | 0.43% | -0.13% | 0.25% | 0.28% | 0.29% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
This section below was published as a preview of the February Canadian employment data at 06:00 GMT.
- The Canadian Unemployment Rate is forecast at 6.6% in February.
- Odds for a Bank of Canada rate hike slowly rise amid the Iran war.
- USD/CAD is trapped between opposed forces, and sellers are winning.
Statistics Canada will release its Labour Force Survey on Friday, and market participants expect a modest uptick in job creation in February, with the Employment Change foreseen at 10K following the -24.8K in the previous month. At the same time, the Unemployment Rate is forecast at 6.6%, following the 6.5% posted in January.
Employment data gains relevance ahead of the Canadian Consumer Price Index (CPI) data scheduled for next Monday, and the Bank of Canada (BoC) monetary policy announcement a couple of days later.
The BoC left its benchmark interest rate unchanged at 2.25% for a second consecutive time at its final meeting of 2025, with investors betting that Canadian policymakers would keep rates on hold throughout 2026. That, however, was prior to the Iran war.
The ongoing Middle East crisis has changed the monetary policy perspective for most central banks, including the BoC. After anticipating a modest hike by the end of 2026, market players shifted to betting on more aggressive tightening to keep inflation under control.
And while the Persian Gulf war is taking its toll mostly on energy prices and hence on inflation, employment levels also affect the BoC decision.
What can we expect from the next Canadian Unemployment Rate print?
Market players project a slight rise in Canada’s Unemployment Rate to 6.6% last month, up from 6.5% in January. Additionally, investors forecast the economy will add a few jobs in February, reversing the previous month’s slump. The Participation Rate was confirmed at 65% in January.
The employment report usually has a large impact on the Canadian Dollar (CAD), particularly if the outcome diverges from expectations. The impact tends to be larger when data is released ahead of the BoC decision.
That may not be the case this time, as the market focus remains on the Iran war. Skyrocketing Oil prices have lent unexpected support to the CAD during periods of risk aversion, with the commodity-linked currency refusing to yield to demand for the safe-haven US Dollar (USD).
Another consequence of the war is that market players are changing their central banks’ bets toward interest rate hikes amid mounting fears that higher energy prices will push inflation up. Inflation-related concerns are largely outweighing the labor market situation in shaping central banks’ decisions.
When is the Canada Unemployment Rate released, and how could it affect USD/CAD?
The Canadian monthly employment report is due on Friday at 12:30 GMT. Generally speaking, a stronger-than-anticipated outcome should provide support to the CAD, while dismal readings should weigh on the local currency. A reading that aligns with expectations usually goes unnoticed.
Ahead of the release, the USD/CAD pair trades above the 1.3600 mark, led by opposing forces: on the one hand, the USD is stronger across the FX board due to heightened demand for safety. On the other hand, the CAD also benefits from stronger Oil prices.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “From a technical point of view, USD/CAD is bearish. The pair recently bottomed at 1.3525. The daily chart shows it managed to post modest advances in the past few days, but selling interest appears to be still strong at around 1.3600, as the pair has been unable to advance decisively beyond it throughout the week.”
Bednarik adds: “The downside seems limited by the 1.3520 area, with a clear break below it exposing the yearly low at 1.3481. An extension below the latter should open the door for a steeper decline, with market participants aiming to test the 1.3400 mark.”
(The technical analysis of this story was updated on March 13 at 12:15 GMT to reflect the latest price movements of the pair.)
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Economic Indicator
Unemployment Rate
The Unemployment Rate, released by Statistics Canada, is the number of unemployed workers divided by the total civilian labor force as a percentage. It is a leading indicator for the Canadian Economy. If the rate is up, it indicates a lack of expansion within the Canadian labor market and a weakening of the Canadian economy. Generally, a decrease of the figure is seen as bullish for the Canadian Dollar (CAD), while an increase is seen as bearish.
Read more.Next release: Fri Mar 13, 2026 12:30
Frequency: Monthly
Consensus: 6.6%
Previous: 6.5%
Source: Statistics Canada
- Gold remains under pressure as Oil-driven inflation fears reinforce higher-for-longer interest rate expectations.
- Strait of Hormuz disruption rattles global energy markets and Oil supply.
- Technically, XAU/USD remains confined within the $5,000-$5,200 range and heads for a second straight weekly loss.
Gold (XAU/USD) struggles to gain traction on Friday and remains on course for a second weekly decline as surging Oil prices stemming from the ongoing US-Iran war fuel inflation concerns and trigger a hawkish repricing of global interest-rate expectations, weighing on the non-yielding metal.
At the time of writing, XAU/USD trades around $5,115, fluctuating within the familiar $5,000-$5,200 range.
Markets showed limited reaction to the latest US economic data, as investors remained primarily focused on escalating geopolitical tensions in the Middle East.
The US Core Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) preferred inflation gauge, rose 0.4% MoM in January, matching both market expectations and the pace recorded in December.
On an annual basis, Core PCE increased 3.0% YoY, coming in below the 3.1% forecast and unchanged from December.
The second estimate of US Gross Domestic Product (GDP) showed the economy expanding at an annualized rate of 0.7% in the fourth quarter, missing the 1.4% forecast and slowing from the previous estimate of 1.4%.
Middle East war disrupts Oil flows, raising inflation risks
Tensions around the Strait of Hormuz continue to rattle global energy markets as the strategic waterway remains effectively closed by Iran’s Islamic Revolutionary Guard Corps (IRGC) since the start of the US-Israeli war against Iran.
The International Energy Agency (IEA) warned that the Middle East war is creating the largest supply disruption in the history of the global Oil market, while Iran’s new supreme leader, Mojtaba Khamenei, said in his first public statement on Thursday that the closure of the Strait of Hormuz should continue as a “tool to pressure the enemy.”
As the US-Iran war shows no signs of de-escalation and inflation fears continue to mount, Gold finds itself at a crossroads. On one hand, persistent geopolitical tensions provide underlying support and help limit deeper losses. On the other hand, expectations of higher interest rates cap the upside, leaving the metal largely range-bound.
Markets scale back Fed rate-cut bets as USD and yields rise
Before the conflict, markets were pricing in at least two Federal Reserve (Fed) rate cuts this year. Now, traders expect the Fed to hold rates steady, with only around 20 basis points of easing priced in by December, according to Bloomberg interest-rate swaps data. Meanwhile, traders now fully price in a European Central Bank (ECB) rate hike by July and are also raising bets that the Bank of England (BoE) could tighten policy by year-end.
Fading Fed rate-cut bets boost the US Dollar and US Treasury yields, adding further pressure on the precious metal. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, climbs above the 100 psychological mark, its highest level since November 2025, while the benchmark US 10-year Treasury yield holds around 4.25% on Friday, hovering near five-week highs.
Technical analysis: XAU/USD tests key support near 200-SMA on 4-hour chart
On the 4-hour chart, XAU/USD shows a mildly bearish near-term bias as the price slips below the rising 100-period Simple Moving Average (SMA) near $5,163 while testing the 200-period SMA around $5,083.
A clear break below this area would expose the next downside level near the $5,000 psychological mark. Below there, focus shifts toward $4,850 and $4,650 as deeper support levels if sellers strengthen control.
On the upside, initial resistance stands near the 100-period SMA, while a recovery above the $5,200 level would be needed to restore the prevailing uptrend.
The Relative Strength Index (RSI) hovers near 42, showing fading bullish momentum but not oversold conditions, which aligns with a controlled downside rather than aggressive selling.
The Average Directional Index (ADX) has turned higher toward 20 after a prior decline, indicating trend strength is rebuilding as the pullback develops.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
TD Securities analysts expect the BoE’s cautious stance to support the US Dollar against the Pound in the near term. They see GBP/USD holding a 1.33 floor under a contained conflict, but warn that escalation and Strait closures could drive a broader USD rally, sending GBP/USD below 1.30 even as GBP outperforms EUR.
GBP/USD levels hinge on conflict path
"The BoE will likely strike a cautious tone given geopolitical uncertainty and delay any pending easing. We expect USD to remain bid in the near-term vs the GBP, but the trajectory is dependent on the duration of the conflict."
"In case of limited regional war (with lower intensity strikes spread out and no ground invasion) and things eventually petering out, we expect 1.33 to be a comfortable floor for the GBP."
"However, in case of further escalation and more permanent closures to the Strait, we will see a broad based USD rally which can send GBP back below 1.30."
"GBP will likely outperform EUR given the delayed pass-through of inflation and lower sensitivity to oil imports and China."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- US Q4 GDP growth revised to 0.7% from 1.4% in the initial estimate.
- The USD Index remains in positive territory near 100.00.
The US Bureau of Economic Analysis (BEA) reported on Friday that it revised the annualized Gross Domestic Product (GDP) growth for the fourth quarter to 0.7% in its second estimate, compared to the market expectation and the initial estimate of 1.4%.
"Real GDP was revised down 0.7 percentage point from the advance estimate, reflecting downward revisions to exports, consumer spending, government spending, and investment. Imports decreased less than previously estimated," the BEA explained in its press release.
Market reaction to US GDP revision
The US Dollar Index ignores this report and stays slightly above 100.00, rising more than 0.3% on the day.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
- Annual core PCE inflation rose to 3.1% in January as expected.
- USD Index clings to daily gains near 100.00.
Inflation in the United States, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, edged lower to 2.8% in January from 2.9% in December, the US Bureau of Economic Analysis (BEA) reported on Friday. This print came in below the market expectation of 2.9%. On a monthly basis, the PCE Price Index was up 0.3%, as anticipated.
The core PCE Price Index, the Federal Reserve's preferred gauge of inflation, rose 3.1% in January, matching analysts' estimate.
Other details of the report showed that Personal Income and Personal Spending both increased 0.4% on a monthly basis in January.
Market reaction to US PCE inflation data
The US Dollar Index showed no immediate reaction to these figures and was last seen gaining 0.35% on the day at 100.08.
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
