Forex News

TD Securities analysts note that USD/CAD has been resilient despite stronger Canadian GDP data, as month-end and quarter-end Dollar demand offsets other forces. The pair has broken above its mid-January highs and they now highlights 1.40 as the next key level.

Pair eyes next key resistance zone

"The near-term growth outlook looks a touch stronger after the 0.1% m/m increase for industry-level GDP in January, with GDP printing above the market consensus for a flat print and TD's forecast for -0.1% m/m. Details were mostly upbeat, with no material headwinds outside the outsized pullbacks in manufacturing and wholesale trade, which were already foreshadowed in the monthly reports from Statistics Canada. "

"The upside surprise on January without any sign of giveback in February has introduced upside risk to our prior forecast for Q1 GDP (+0.9% saar), but it's still not enough to validate markets that remain priced for nearly 50bps of tightening by December."

"Although a robust GDP report was buoyed by oil and gas even before the conflict began, USD/CAD has stayed stable as month- and quarter-end USD buying counterbalances other pressures. After surpassing its mid-January highs, USD/CAD continues to rise, with 1.40 emerging as the next important target. "

"The Bank was already working with a 1.8% projection for Q1 GDP, so the upside surprise in today's report should move the market a little closer to the Bank's forecast, rather than introducing upside risks to the BoC's forecast. Labour market headwinds and softer core inflation momentum give the Bank more incentive to stay on the sidelines through 2026, and we continue to look for the next rate hike in 2027Q1."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Iran's state media reported on Tuesday that Iran's Islamic Revolutionary Guard Corps (IRGC) announced that they will target United States (US) companies, including Google, Apple, Intel, Boeing, IBM and Tesla, in the region as of April 1 in retaliation for attacks on Iran.

"These companies should expect the destruction of their respective units in exchange for each terror act in Iran, starting from 8 PM Tehran time on Wednesday, April 1st," the IRGC statement said, as reported by Reuters.

Market reaction

This headline doesn't seem to be having a significant impact on risk mood. At the time of press, the Nasdaq Composite Index was up 1.15% on the day, while the S&P 500 was gaining 1%.

Societe Generale’s Dev Ashish expects Brazil’s economy to expand below trend in 2026 as tighter policy and a weaker external backdrop weigh on activity. Inflation is seen pressured by higher Oil prices, though soft demand offers some cushion. The Central Bank of Brazil (BCB) is projected to ease cautiously, with larger rate cuts postponed until Oil pressures recede, while elections cloud fiscal consolidation prospects and medium‑term direction.

Sub‑trend growth with cautious BCB easing

"Economy to grow below trend in 2026 as tighter policy and weakening external outlook weigh on activity."

"Higher oil price is pushing expectations higher, though weak demand cushions somewhat."

"BCB to ease slowly; meaningful cuts delayed until oil pressures fade."

"Oil helps but elections add uncertainty to consolidation and medium‑term fiscal direction."

"Balance of risks spans global demand, oil‑driven inflation, and post‑election fiscal shifts."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Silver price rallies sharply on Tuesday, supported by optimism over a possible de-escalation between the United States and Iran.
• Investors expect that easing geopolitical tensions could push energy prices lower and moderate global inflation pressures.
• Softer inflation expectations could encourage central banks to adopt a less restrictive monetary stance.

Silver (XAG/USD) surges on Tuesday and trades around $73.70 at the time of writing, up 5.14% on the day. The precious metal is benefiting from a weaker US Dollar (USD) and renewed optimism in markets after reports indicated that US President Donald Trump is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed.

According to a Wall Street Journal report, Donald Trump told aides he is open to pursuing a diplomatic resolution with Iran. The report added that US administration officials believe that forcibly reopening the Strait of Hormuz would require extending the military operation well beyond the initially estimated four-to-six-week timeline.

In theory, easing geopolitical tensions usually reduces demand for safe-haven assets such as Silver. However, the white metal is outperforming as markets expect that a Middle East truce could lead to lower Oil prices, helping to ease global inflation expectations.

In recent weeks, the surge in energy prices caused by supply disruptions linked to Middle East tensions has fueled concerns about persistently high inflation. Such a scenario generally encourages central banks to keep monetary conditions restrictive, which tends to reduce the appeal of non-yielding assets such as Silver.

If regional tensions continue to ease and Oil prices decline, investors could start revising down their expectations for restrictive monetary policies. This outlook is currently supporting demand for Silver, which benefits both from its safe-haven status and its sensitivity to inflation and interest rate expectations.

The consumer sentiment in the United States (US) improved slightly in March, with the Conference Board's Consumer Confidence Index edging higher to 91.8 from 91 in February (revised from 91.2).

"The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined by 1.7 points to 70.9," the Conference Board noted in its press release and added: "While not obvious in the headline or its component indexes, the weight of rising costs due to tariff passthrough and spiking oil prices was evident among other measures in the survey like inflation expectations."

Market reaction

The US Dollar Index (DXY) remains in the lower half of its daily range and was last seen losing 0.4% at 100.08.

Royal Bank of Canada (RBC) economists note Canada's GDP grew 0.1% in January, slower than December but above expectations, with goods-producing industries outperforming and services flat. They highlight an advance estimate of 0.2% for February and Q1 tracking between its 1.3% GDP forecast and the Bank of Canada's 1.8% projection. Policy rates are expected to stay on hold.

Modest GDP gains and steady policy outlook

"Canada's GDP growth increased by 0.1% in January, marking a deceleration from the 0.2% gain in December but slightly higher than Statistics Canada's advance estimate a month ago and our own expectations of flat performance. Goods-producing industries delivered upside surprises while services activity remained essentially flat and aligned with forecasts. Temporary factors influenced results, particularly in manufacturing, where auto plant shutdowns linked to longer than usual model changeovers weighed on output."

"Weak spots in January were concentrated in manufacturing, wholesale trade, and housing-related sectors. These pullbacks were offset by stronger energy production, construction sector output, and a modest rebound in mining excluding oil and gas. Retail volumes also rose, pointing to continued resilience in consumer spending at the start of the year."

"Looking ahead, advance GDP estimate suggests continued expansion in February (+0.2%) as temporary drags begin to fade. This aligns with early industry indicators. Manufacturing sales rebounded, supported by stronger transportation equipment and food production, while retail and wholesale metrics also point to positive momentum."

"On a quarterly basis, activity remains broadly consistent with our base case for moderate expansion following negative Q4 performance with the early monthly data tracking between our own 1.3% (annualized rate) Q1 GDP growth forecast and the Bank of Canada's 1.8% projection. With slowing population, per-capita improvement is expected to continue. For the Bank of Canada, we expect the policy rate to remain on hold, as officials await greater clarity on elevated oil prices due to the ongoing conflict in the Middle East and the impacts on inflation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Commerzbank analysts Carsten Fritsch and Barbara Lambrecht highlight that the Iran war and Strait of Hormuz closure have sharply lifted Brent and refined product prices, especially diesel and jet fuel. They stress Europe’s heavy reliance on Middle Eastern middle distillates and the difficulty of replacing lost barrels. Their base-case assumes war ends in late spring, with diesel and jet fuel still above pre-war levels by year-end.

Iran war drives refined product squeeze

"The war in Iran, which has been ongoing for around a month, has led to significant disruption in the energy markets. The price of Brent crude has risen by around 57% since the beginning of March and is on track for its sharpest monthly increase in at least 38 years. Prices for oil products such as diesel and jet fuel have risen even more sharply."

"In addition to the sharp rise in crude oil prices, there was also a significant widening of crack spreads for oil products – the price differences between the oil product and crude oil. The gasoil crack spread peaked at USD 56 per barrel. The diesel crack spread reached the equivalent of nearly USD 80 per barrel, whilst the jet fuel crack spread exceeded USD 100 per barrel."

"Middle distillates account for another third of oil product exports from the Middle East. According to the IEA’s monthly report, 730,000 barrels per day of this total last year were gasoil/diesel and 380,000 barrels per day were jet fuel. The remainder of oil product supplies consisted of gasoline and fuel oil."

"Filling this gap from other sources is likely to be difficult. This is because the Asian OECD countries also have a gap of up to 240,000 barrels per day to fill in diesel/gas oil, which they have so far sourced from Asian non-OECD countries. Due to the shortage of oil products in those regions, these countries are also likely to reduce their exports or, as in the case of China, even cease them entirely."

"We have revised our price forecasts for diesel and jet fuel upwards accordingly. For diesel, we expect prices of USD 1,100 per ton by mid-year and USD 850 per ton by the end of the year. The price of jet fuel is likely to be USD 1,250 per ton at mid-year and USD 950 per ton at the end of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• US Job Openings declined slightly in February.
• USD Index stays deep in negative territory near 100.00

The number of job openings in the United States (US) declined to 6.882 million in February from 7.24 million in January, the US Bureau of Labor Statistics (BLS) reported in its Job Openings and Labor Turnover (JOLTS) report on Tuesday. This reading came in below the market expectation of 6.92 million.

"Over the month, hires decreased to 4.8 million, and total separations changed little at 5.0 million," the BLS noted in its press release. "Within separations, quits (3.0 million) were little changed while layoffs and discharges (1.7 million) were unchanged."

Market reaction

The US Dollar (USD) remains under bearish pressure following this report. At the time of press, the USD Index was down 0.4% on the day at 100.08.

ING’s commodities team highlights that Aluminium prices rallied toward $3,500/t on the LME as Middle East supply risks escalated. Damage at Emirates Global Aluminium and potential disruption at Aluminium Bahrain threaten around 3.2Mt of annual capacity. With prior curtailments in the Gulf and Aluminium on track for a 10% monthly gain, the market appears increasingly constrained.

Regional disruptions support Aluminium prices

"Aluminium prices rallied on Monday, briefly nearing $3,500/t on the LME, as Middle East supply risks escalated."

"Emirates Global Aluminium (EGA) said it sustained significant damage at its Abu Dhabi smelter, while Aluminium Bahrain (Alba) is assessing the impact at its facility, after Iran’s Revolutionary Guard said the sites were targeted in retaliation for US‑Israeli strikes."

"Together, the two smelters account for around 3.2Mt of annual capacity, and any prolonged outage would further tighten an already constrained market, where restarting smelters is costly, complex and time-consuming."

"The escalation comes on top of already tightening supply conditions across the Gulf."

"Recent curtailments at Alba and reduced operations at Qatalum have already affected around 560kt of annual capacity, equivalent to roughly 8-9% of regional supply."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)