Mitsubishi UFG Says Global Growth Slowdown to Weigh on Commodity Currencies, Including Canadian Dollar

07:17 AM EDT, 03/25/2026 (MT Newswires) -- The major foreign exchange rates have remained stable overnight Tuesday, as market participants wait to see if there is any progress in talks between the United States and Iran to end the conflict, said MUFG.

The price of oil has settled back closer to US$100/barrel for Brent. It was reported overnight that the U.S. has drafted a 15-point plan intended to bring the conflict to an end, according to people familiar with the matter. The plans were reportedly delivered to Iran via Pakistan and have been worked on by Jared Kushner and Steve Witkoff. Iran reportedly has 24 hours to respond to the plan.

The U.S. demands for Iran reportedly include: i) it must dismantle existing nuclear capabilities, ii) it must never pursue nuclear weapons, iii) the Strait of Hormuz must remain open and function as a free maritime corridor, iv) it must abandon its regional proxy paradigm, and v) it's missile program must be limited in both range and quantity. In return, Iran would: i) receive full lifting of sanctions imposed by the international community, and ii) the U.S. would assist Iran in advancing its civilian nuclear program.

It now remains to be seen whether Iran will agree to the "maximalist" demands from the U.S., wrote the bank in a note to clients

At the same time, it was reported that the Pentagon is planning to send more troops to the region. The WSJ reported that the U.S. Army's elite 82nd Airborne Division will be deployed to support operations in Iran, which is made up of roughly 3,000 soldiers. The report adds that a decision to put boots on the ground in Iran hasn't been made but the movement of the 82nd Airborne Division opens the door for President Donald Trump to try to reopen the Strait of Hormuz by force, seize Iran's strategic islands or coastline, or launch a mission to capture the regime's highly enriched uranium should he choose to do so.

In addition, the New York Times has reported that Saudi Crown Prince Mohammed bin Salman sees a "historic opportunity" to remake the region according to people briefed by U.S. officials, and has been pushing President Trump to continue the war with Iran to remove the hardline government. The report has been dismissed by Saudi officials, who emphasized that Saudi Arabia has always supported a peaceful resolution to this conflict.

The developments still highlight the risk that the Middle East conflict could escalate further, pointed out MUFG.

The US dollar (USD) has softened over the past week, reflecting in part investor optimism over a quicker end to the conflict, stated the bank.

The G10 commodity currencies of the Norwegian krone (NOK), Australian dollar (AUD), Canadian dollar (CAD or loonie) and New Zealand dollar (NZD) have all underperformed alongside the US dollar, which could be an early indication that market participants are becoming more concerned over downside risks to global growth from the energy price shock, accoridng to MUFG.

The price of copper, which is viewed as an important gauge of global demand, has fallen sharply over the past week to its lowest level since late last year, it added.

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