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Global Travel Industry Reels as Middle East Conflict Triggers Deep Market Shock

Stranded passengers wait near Emirates Airways customer service office at I Gusti Ngurah Rai International Airport in Kuta, Bali, Indonesia. Travel stocks have plunged sharply as the escalating conflict involving the US, Israel, and Iran triggers the most severe disruption to global aviation since the pandemic. Major Middle Eastern hubs—including Dubai, the world’s busiest international airport—have remained closed for days, stranding tens of thousands of passengers and forcing airlines to reroute or cancel flights on a massive scale.  Oil prices have surged by about 7% amid rising geopolitical tensions, adding further pressure to airlines already grappling with operational chaos. Higher fuel costs are expected to squeeze margins across the sector, with analysts warning that the ripple effects could last for weeks.  European travel giants have been hit especially hard. Shares in TUI dropped 8.5% in early trading, while Lufthansa and other major carriers saw declines of up t...
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Loonie gains as oil prices climb and Fed rate hike seen unlikely

The Canadian dollar edged higher against its U.S. counterpart on Monday as oil prices rose and investors bet that the Federal Reserve would not raise interest rates at a meeting this week.

The loonie was trading 0.2% higher at 1.3565 to the greenback, or 73.74 U.S. cents, after moving in a range of 1.3548 to 1.3590. Last week, the currency touched its weakest in nearly five weeks at 1.3599.

Oil prices climbed on Monday, supported by expectations of tighter supply and signs of economic recovery. Canada is a major exporter of crude oil, so the loonie tends to benefit from higher oil prices.

Investors were also looking ahead to the Fed’s policy decision on Wednesday, which is widely expected to deliver a rate hike of 50 basis points, the first since 2018. However, some analysts said the Fed could signal a pause in its tightening cycle amid signs of slowing growth and inflation in the U.S.

“The market is pricing in a very dovish Fed, which is supportive for the Canadian dollar,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets. “The Fed is likely to acknowledge the downside risks to the outlook and may hint at a slower pace of rate hikes next year.”

Rai said he expected the loonie to strengthen to 1.33 per U.S. dollar by the end of the year, as the Bank of Canada (BoC) maintains its hawkish stance. The BoC has raised its benchmark rate four times this year to 4.25%, the highest in nearly 15 years, and has said it will study the most recent economic data to gauge whether to hike further.

The Canadian dollar was also supported by domestic data that showed the value of building permits rose by 2.5% in October, beating market expectations of a 0.5% decline.

Canadian government bond yields rose across the curve, tracking the move in U.S. Treasuries. The 10-year was up 3.4 basis points at 2.916%.

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