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News
Tuesday, March 17, 2026
What’s happening: The Canadian dollar edged higher against the US dollar this morning as investors digested the latest inflation report.
What happened: Easing geopolitical concerns around the supply of crude oil provided some relief to investors.
Amid speculations of the Federal Reserve refraining from rate cuts, strength in the US dollar weighed on the loonie.
Why it matters: The conflict in the Middle East has now entered its third week. The US has been asking countries like China to help escort merchant vessels through the Strait of Hormuz to ease the pressure on oil prices.
Meanwhile, the US announced attacks on military targets at Iran’s key oil-export hub of Kharg Island over the weekend, while warning to strike energy infrastructure in case Iran continues its interference with the Strait of Hormuz.
Fears eased on Monday after some tankers safely navigated the Strait of Hormuz, raising hopes of the route being reopened soon.
Higher prices for crude oil, one of Canada’s major exports, lent support to the loonie. Spot prices for WTI crude oil jumped 2.1% to $95.16 per barrel this morning.
Data released on Monday showed headline inflation in Canada declined more than expected to 1.8% in February, from 2.3% in the previous month. This marked the softest inflation rate in almost a year. This recent trend followed a sharp decline in the labour market, which showed a loss of 83,900 jobs and the unemployment rate rising to 6.7%.
Housing starts in Canada rose 4.5% in February to an annual rate of 250,900 units, compared to 240,148 in the previous month. However, the figure came in below market estimates of 252,500 units.
Strength in the US dollar limited the overall gains for the Canadian currency. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.2% to 99.92 this morning.
The USD/CAD forex pair slipped to 1.3686 this morning.
What to watch: Investors will keep an eye on the ongoing US-Iran war and activity in the Strait of Hormuz.
Several global central banks, including the US Fed, European Central Bank, Reserve Bank of Australia, Bank of Japan and Bank of England are scheduled to hold their respective monetary policy meetings this week, which would be their first since the start of the Middle East conflict.
The Bank of Canada will announce its policy decision on Wednesday, with markets expecting the central bank to keep overnight target rate unchanged at 2.25%.
Context: Equity markets in Europe recovered on Monday, mirroring a rebound in global markets and easing crude oil prices.
Details: Oil prices eased slightly on Monday after LPG tankers crossed the Strait of Hormuz towards India, signalling Iran’s leniency on exports to some nations.
President Donald Trump urged several nations to help ensure the Strait of Hormuz remains open. However, markets continued to assess the impact of the conflict on the global economy.
Financial stocks were among the top performers on Monday, with shares of Commerzbank surging nearly 9% after UniCredit announced an offer to increase its stake to over 30% without seeking control. HSBC Holdings also recorded strong gains during the session. Chip producers moved higher, with ASML’s shares gaining 1.5% on Monday.
The STOXX Europe 600 Index rose 0.44% to settle at 598.47 on Monday, while London’s FTSE 100 gained 0.55% to close at 10,317.69. Germany’s DAX 40 rose 0.50% to 23,564.01, while France’ CAC 40 added 0.31% to 7,935.97.
What to watch: Investors await the release of data on Eurozone’s ZEW economic sentiment index (1400 UAE Time) today. The ZEW indicator of economic sentiment for the Eurozone, which declined by 1.4 points from the previous month to 39.4 in February, is expected to dip to 24 in March.
Data on inflation will be released on Wednesday. Analysts expect the Eurozone’s annual inflation rate to accelerate to 1.9% in February from January’s 16-month low of 1.7%.
The European Central Bank will announce its policy decision on Thursday. The ECB is expected to keep its benchmark interest rates unchanged at the upcoming meeting.
Other Markets: US trading indices closed higher on Monday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.83%, 1.01% and 1.13%, respectively.
Explosions echoed across Kyiv in a rare daytime assault on Monday as Russia intensified drone attacks on Ukraine. The news sent the USD/RUB pair lower in forex trading this morning.
Singapore’s non-oil domestic exports climbed 4.0% year-over-year in February, decelerating from the previous month’s 9.2% surge. The latest reading falling short of market estimates of 4.9% lent support to the USD/SGD forex pair.
New Zealand’s annual food inflation surged to 4.5% in February from 4.2% in January, which sent the NZD/USD pair lower in forex trading this morning.
Colombia’s industrial production fell 0.5% year-over-year in January following a 0.6% decline in December. The latest reading coming in below market estimates of a 0.2% gain lent support to the USD/COP forex pair.
South Korea’s import prices climbed 1.2% year-over-year in February following a 0.9% decline in January, which sent the USD/KRW pair higher in forex trading this morning.
Italy’s inflation rate (1300 UAE Time), Germany’s ZEW economic sentiment index (1400 UAE Time) and ZEW current conditions (1400 UAE Time) as well as US ADP employment change weekly (1615 UAE Time), NY Fed services activity index (1630 UAE Time), Redbook index (1655 UAE Time) and pending home sales (1800 UAE Time).
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