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Economic News

FX Forecast Update

March 16, 2026
Mirza Shaheryar Baig
Foreign Exchange Strategist

Highlights

  • Energy prices are likely to remain elevated on supply disruptions. We are changing some of our FX forecasts to reflect the new balance of risks. 

Comments

North America is long energy, Europe and Asia are structurally short. In a prolonged disruption, North America’s energy self‑sufficiency would become a major macro advantage. It would help shield the outlook for the US and Canada, while regions that rely heavily on imported energy would be far more vulnerable to higher costs and shortages.

Markets have priced in higher rates in most developed countries. But rate hikes amidst a supply shock are not a currency positive – they are a double whammy. Europe is experiencing a second energy shock in just four years, which could further weigh on an already fragile growth outlook. Several Asian economies are also exposed to a similar risk, including China, India and Japan.

Implications

We are shading our forecasts down for currencies of energy importing economies, but we have left our forecast for USDCAD largely unchanged. That means we expect the loonie to remain stable versus the US dollar, but rise versus oil importing majors like EUR, GBP and JPY over the next 1-3 months. 

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.