Currency Markets review (week ending 15th May, 2026) and USDCAD outlook for next week

Last week, the US Dollar dominated global currency markets following a surprise acceleration in US inflation data, which fueled expectations that the Federal Reserve might hike interest rates once more before year-end. The Euro suffered a sharp five-day sell-off toward 1.1600 support, while the British Pound showed relative resilience ahead of key UK economic data. The Japanese Yen remained under pressure near 160.00 against the Dollar, keeping markets alert for potential intervention by the Bank of Japan.

Meanwhile, USD/CAD closed a conflicted week around 1.3720–1.3750, caught between a strong US Dollar and a rally in crude oil prices past $110 per barrel—a tailwind that supported the Canadian Dollar as a major oil exporter. For the coming week, the pair is expected to consolidate in a range of roughly 1.3650 to 1.3830, with a slight upward bias as the Dollar retains a technical edge despite ongoing tension between oil-driven support for the Loonie and Fed-driven strength for the Greenback.

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Is GBPUSD ready to go north?

The GBPUSD broke resistance 1.2443 yesterday, the 5th of April, 2023 after moving sideways for about three and a half months. This breakout might put some Investors on edge and they might be watching price action to see if GBPUSD is indeed ready to go north.

The pair GBPUSD has been choppy since December, 2022 and only yesterday, 5th of April, 2023,  price broke out of the channel. This can be seen on the GBPUSD daily chart below:

As at the time of writing, price is now testing resistance turned support at 1.2443 as can be seen on the 4hr chart below:

The dollar has been under pressure since the announcement of banking crisis in the United States of America. Notable banks that failed are the Silicon Valley Bank and Signature Bank.

This bank failure is one of the reason the pound is appreciating against the dollar.

Few days ago the Chief Economic adviser to the Bank of England and Member of the Monetary Policy Committee, Huw Pill, hinted that interest rates might be hiked in the Month of May while delivering a speech to the Graduate Institute in Geneva.

With recent developments in UK and USA and the breakout of a three and half month old channel, investors might hope to see GBPUSD go North.

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FOREX - Euro further weakens even as Russian-Ukraine crises escalates

 The Euro has weakened further even as Russian-Ukraine crises escalates. Russian invaded Ukraine on the 24th of February, 20222 and the war has since escalated.

The Russian-Ukraine war has imparted on some currencies especially the Euro. EURUSD pair dropped to a yearly low of 1.0884 as last Friday.

The EURAUD pair is so interesting to watch. We notice as the war escalates, this pair falls so badly. As a result of so many sanctions imposed on Russia, there has been high demand for commodities from Australia and so the Aussie is strong as seen in the Chart above. 

We might see a reversal of the Euro pairs if there is a change of the situation on ground in Ukraine.

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OPEC and allies agree to cut global oil output by 9.7 million barrels per day in May and June

After four days of negotiations, OPEC and allies, on Sunday, agreed to cut global oil output by 9.7 million barrels per day in May and June.

A series of interventions by US President Donald Trump pressured the group, known as OPEC+ in taking the decision to reduce global crude output by roughly 10%. 

On Sunday, Trump praised the deal and tweeted:

The big Oil Deal with OPEC Plus is done. This will save hundreds of thousand of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval office. Greal deal for all!

Upon announcement of the agreement, oil prices spiked higher more than a $1 per barrel in Monday trading, but gains were capped amid concern that it would not be enough to head off oversupply with the Coronavirus pandemic hammering demand.

There has been an oversupply of oil firstly, due to the dispute between Saudi Arabia and Russia, which triggered the price war and secondly, the Coronavirus pandemic which has killed more than 100,000 people globally and kept businesses and Governments on lockdown. Except this pandemic is curbed, the demand for oil would be very low.

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Coronavirus affecting businesses as spread increases

Coronavirus also called Covid-19, first identified in China in late 2019, has affected so many businesses even as the spread increase worldwide.

As at the time of writing, every continent except the Antarctica has been affected by this pandemic with confirmed Global total cases recording more than one million seven hundred cases and over a hundred thousand deaths.

Over 200 countries worldwide had instituted either a full or partial lockdown, and many others had recommended restricted movements, affecting billions of people and their businesses.

Since the outbreak of this virus, price of Oil has been on a free-fall due to low demand and the feud between Saudi Arabia and Russia.

Global financial stocks have also plummeted significantly from its peak. Some economists have forecast ed that there would be recessions across many countries in the near future. I also concur with them.

The WHO advice for public is as follows:

• Wash your hands frequently
• Maintain social distancing
• Avoid touching eyes, nose and mouth 
• Practice respiratory hygiene

If these  guidelines of the WHO is strictly adhered to, the spread would stop and the pandemic would be contained. The price of not taking these measures is huge. l enjoin everyone to stay safe.

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