March 16, 2026

USDCAD open: 1.3701, overnight range 1.3674-1.3730, close 1.3719

USDCAD rallied Friday after StatsCanada reported the country lost 83,900 jobs in February and that the unemployment rate rose to 6.7% from 6.5%. The only good thing that you can say about the results is “it could have been worse.”

Trump’s Iran war which has driven up oil prices, and Trump’s trade war which is crushing Canadian steel, aluminium, and auto manufacturing industries puts the BoC in a bind. Do they hike rates to stave off an inflationary spike or cut them to boost a tanking economy? The clue is Governor Tiff Macklem’s comments on October 29, the last time the BoC cut rates. At the time he said monetary policy has done all it can do to stimulate growth, meaning it was up to the Federal government to provide stimulus.

The inflation question is not an issue. So far, the spike in oil is not a concern. That’s because the CPI data is for February, before Trump’s war on Iran. Canada CPI rose 1.8% y/y in February, down from the 2.3% in January. while the BoC core measure rose 2.3% y/y compared to 2.6% previously.

WTI oil prices chopped about in a 95.13-99.71 range.  The Strait of Hormuz is closed but only to shipments destined to certain countries.  A Pakistan tanker laden with crude sailed through the Strait unimpeded.

Today’s US data includes Capacity utilization and Industrial production.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while trading above 1.3660 as prices consolidate after Friday’s failed attempt to breach the November downtrend line in the 1.3740-50 area. A move back below 1.3660 would put 1.3620 support back in play.

USDCAD is in a short-term uptrend from the March 10 low near 1.3515, and the rally stilkl has momentum after the RSI eased from over-bought. On the daily chart, price remains below the 100- and 200-day moving averages around 1.3810–1.3820, which keeps the broader medium-term bias neutral to slightly bearish. However, holding above 1.3620–1.3660 keeps the near-term bullish structure intact and maintains upside pressure toward the 1.3740 area.

For today, USDCAD support is at 1.3660 and 1.3620. Resistance is at 1.3730 and 1.3760.

Today’s Range: 1.3660–1.3740

FX Heat Map (6:00 am) one week

FX  open high low 6:00 am

Trump Feeling the Heat

Iran’s Karg island is burning after weekend attacks by US forces, but it is Trump that is feeling the heat. It is the start of March Break (Spring Break) in many parts of the US and Canada, and Trump has ensured that travel is a nightmare.

The partial closure of the US government has not endured his administration to travellers.  Many TSA workers (who are not getting paid) have quit or just not showed up to work creating long lines at airport security check-ins. His Iran diplomacy has driven gasoline prices sky-high which may even erode Trump’s fanatical base.

Help! I need Somebody

Trump launched Operation Epic Fury on February 28 and 16 days later he faces epic fury from 1/2 of American voters for starting a war unilaterally and without a plan. Now he is demanding (threatening) NATO members, the same ones who were not consulted or told in advance about his decision to attack Iran, to help America open the Straits of Hormuz. He warned NATO forces face a “very bad future” if the allies do come to his aid. He also wants China to help open the Strait or perhaps the anticipated Xi Jinping/Trump meeting may not happen.

He also went on a long rant about how the US justice system treats “Republicans and me, so unfairly….”

Busy Week for Central Banks

Central bankers are in the limelight this week. The RBA meeting is tonight, Wednesday the BoC, the Fed, and BoJ, Thursday the SNB, BoE, and ECB. Of the seven, only the RBA is expected to be decisive by raising rates by 25 bps. The rest are expected to stay on hold while failing to provide much in the way of forward guidance due to “the Iran war clouding the outlook.”

Taking Stock

Asian equity markets finished the session with losses except for those in China. Japan’s Topix dropped 0.50%, Australia’s ASX 200 lost 0.39%, while Hong Kong’s Hang Seng rose 1.45%.

As of 6:45 am, European bourses are treading water. The French CAC 40 has lost 0.26%, the UK FTSE 100 has gained 0.20%, and the German DAX is flat. S&P 500 futures have climbed 0.52%, the 10-year Treasury yield is 4.256%, and gold (XAUUSD) is 4,993.89.

EURUSD

EURUSD squeezed out small gains, rising from 1.1414 to 1.1456, where it sits in early NY trading. There haven’t been any material developments in Trump’s Iran war, so traders have shifted their focus to Tuesday’s ZEW German and Eurozone surveys, ahead of Wednesday’s FOMC decision.

GBPUSD

GBPUSD drifted in a 1.3226-1.3266 range. The prospect of steady US rates for longer and expectations that anticipated BoE rate hikes would also be delayed are weighing on prices. GBPUSD got a bit of a boost after the UK government announced plans to support households hit by rising heating oil costs.

USDJPY

USDJPY traded choppily in a 159.18-159.75 range. The yen is not seeing much in the way of safe-haven demand because the Japanese economy is heavily reliant on imported oil and, for now, the risk of even higher crude prices is driving USDJPY direction. Traders are mindful of potential BoJ FX intervention if prices get above 160.00, and Finance Minister Satsuki Katayama said as much on the weekend.

AUDUSD

AUDUSD traded firmer in a 0.6981-0.7033 range and is at the overnight session peak in NY. The currency is underpinned by expectations the RBA will raise rates by 25 bps tomorrow and issue a hawkish statement.

USDMXN

USDMXN traded sideways in a 17.8156-17.9535 range, with price action tracking global risk sentiment. Mexican markets are closed today.

China

USDCNY Fix: 6.9057 vs exp. 6.9061 (Prev. 6.9007)

Shanghai Shenzhen CSI 300 rose 0.05% to 4,671.56

China February Industrial Prices (IP) rose 6.3% y/y (forecast 5.1, January 5.2%).  Retail Sales rose 2.8% y/.y (forecast 2.5% vs January 0.9%)

The Chinese economy is on better footing than previously thought and may delay PBoC rate cuts and are seen as a cushion against external disruptions.

Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics Tradingview