Markets Brace for US Payrolls as Oil Surge From Iran Conflict Moves Currencies

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar        1.3530-1.3780

Euro                1.5660-1.5910

Sterling           1.8090-1.8340

WTI Oil (opening level) $86.42

The CAD/USD is opening at 1.3656 ( 0.7323 )

The USD/CAD pair trades in a tight range ahead of the US Nonfarm Payrolls (NFP) data for February, which will be published this morning.

Investors will pay close attention to the US NFP data to get fresh cues on the Fed monetary policy outlook. The US NFP report is expected to show that the economy created 59K fresh jobs, significantly lower than 130K in January. The Unemployment Rate is seen steady at 4.3%.

The broader outlook of the US Dollar remains firm amid the war in the Middle East involving the US, Israel, and Iran. Middle East conflicts have prompted the demand for safe-haven assets.

Amid the Iran conflict, the CAD has been performing strongly due to rising oil prices. Given that Canada is the largest exporter of oil to the US, higher oil prices are a favorable situation for the Canadian Dollar.

Headlines

• The Trump administration might release emergency reserves and waive fuel requirements to address rising oil prices due to the Iran conflict. Prices surged 20% as tensions halted Strait of Hormuz shipments. Trump seeks influence over Iran's leadership as Israeli airstrikes persist; Iran denies seeking a ceasefire.
• US initial jobless claims were steady at 213,000 in late February, below the expected 215,000. Continuing claims rose by 46,000 to 1,868,000, surpassing the expected 1,850,000, reflecting labor market stability. Federal employee claims decreased by 25 to 529, amid government shutdown scrutiny.
• US nonfarm productivity rose 2.8% in Q4 2025, exceeding the expected 1.9%. Output increased 2.6%, while hours worked decreased by 0.2%. Manufacturing productivity fell 1.9% as output and hours worked declined. Durable goods productivity dropped 3.0%; nondurable fell 0.2%. 2025's average productivity growth was 2.2%, down from 3.0% in 2024.
• US employers announced 48,307 job cuts, down from January's 108,435 and last year's 172,017. Tech led with 11,039 cuts, driven by AI impacts and rising costs. Education and manufacturing followed with 5,417 and 4,109 cuts. More layoffs may occur due to US involvement in Iran. Tech faced the most cuts this year at 33,330, followed by transportation (31,702) and health care/products (19,228).

Key Points

• Equities: Oil fears hit the U.S. and Europe, while Asia steadied on Friday as crude eased and bargain hunting returned.
• Volatility: Oil shock, Iran conflict, payrolls ahead, hedging demand persists
• Digital Assets: Bitcoin near $70k, IBIT outflows, ETHA inflows,
• Currencies: Major currencies rangebound, though JPY weakening Friday has USDJPY threatening key resistance just below 158.00
• Commodities: Oil prices ease back slightly after large jump Thursday , particularly in WTI crude
• Fixed Income: Global yields pressured higher on inflation fears from higher energy prices