04:24 PM EDT, 07/13/2026 (MT Newswires) -- The Toronto Stock Exchange fell on Monday as investors weighed renewed geopolitical tensions in the Middle East, a sharp jump in oil prices and expectations the Bank of Canada will keep interest rates unchanged this week.

The S&P/TSX Composite Index closed down 52.59 points, or 0.15%, to 35,252.72, with the majority of sectors closing higher.

Energy led gainers, up 3,17%, with Battery Metals Index, Health Care, Utilities, Telecom, Industrials, and Information and Technology, up 0.50%, 1.18%, 0.10%, 0.65%, 0.14%, and 0.08%, respectively. Base Metals was down 2.58%, while Financial was down 0.37%

In commodities, gold fell to its lowest level this month on Monday amid heightened inflation worries following renewed fighting between Iran and the US over the weekend. The precious metal for August delivery was last seen down $105.10, or 2.6%, to $4,008.60 per ounce, the lowest since June 24. The US on the weekend struck sites in Iran, while Tehran targeted shipping in the Strait of Hormuz and US assets in neighboring countries.

Meanwhile, West Texas Intermediate (WTI) crude oil surged 9.2% on Monday to the highest in a month after the Middle East conflict escalated, fueling concerns about potential disruptions to global crude supplies. WTI crude oil closed up $6.73 to settle at $78.14 per barrel, the highest since June 15, while September Brent crude was last seen up $7.39, or 9.7%, to $83.40.

In currencies, ING sees limited upside for Canadian Dollar and forecasts USD/CAD at 1.36 in one year. The Canadian dollar is unlikely to receive much support from interest rate differentials because Canadian yields don't offer a compelling advantage over US yields, according to ING Global Markets Research in a note Monday.

ING said it sees limited scope for markets to meaningfully bring forward expectations for Bank of Canada tightening, with only around 17 basis points of hikes currently priced by year-end. The bank forecasts the USD/CAD exchange rate at 1.41 in one month, at 1.39 in three months, at 1.37 in six months and at 1.36 in one year.

Separately, Commerzbank said a "significant" appreciation of the Canadian dollar against the US dollar is unlikely to take place until there's a Federal Reserve repricing or progress in trade relations with the United States.

"Lower USD-CAD levels are unlikely to materialize until then," wrote Commerzbank Foreign Exchange Analyst Michael Pfister in the note on Monday. A renewed escalation in the Iran conflict could push oil prices higher and provide near-term support for the Canadian dollar, as Canada is a major oil exporter, noted Commerzbank.

While economists broadly expect the Bank of Canada to remain on hold this week, some see the next policy move shifting toward tightening as the economy regains momentum. The BoC is expected to leave its policy rate unchanged on Wednesday for the sixth time in a row, acknowledging that inflation risks have eased as oil prices have fallen sharply in recent weeks, according to economists.

Policymakers are also likely to reiterate that there is little evidence higher energy prices have spilled over into broader inflation, while emphasizing that they remain prepared to tighten policy if inflationary pressures re-emerge, said economists.

UBS said in a note that it sees a hold decision at the BoC, keeping the policy rate at 2.25%. "We expect the signal to remain standing pat amidst ongoing uncertainty with the Governor likely to lean into the scenarios that could lead to hikes (broader inflation pressures and stronger growth) or cuts (ongoing economic weakness with narrowly driven headline price pressures)."

Canada's economy is evolving broadly in line with expectations, with activity rebounding after an early-year soft patch, allowing Scotiabank Economics to predict the BoC will begin gradually hiking rates toward the end of 2026.

April gross domestic product rose a stronger-than-expected 0.5% on the month, while labor market conditions are improving sooner than expected, wrote the bank in a note Monday. Scotiabank maintains its 2026 growth forecast of 0.9%, with momentum building as rate cuts support demand and government spending picks up. Growth is expected to accelerate to 2.2% next year.

Meanwhile, attention also remained on Canada-US trade relations ahead of the opening of the Gordie Howe International Bridge later this month.

The opening of the new Gordie Howe Bridge between Canada and the US is scheduled for July 27, following a weekend agreement that cleared unexpected concerns raised by President Donald Trump's administration over its launch, according to Scotiabank Economics.

Although the resolution supports trade and cross-border activity, the dispute underscores lingering concerns over contract certainty, investment confidence and the durability of bilateral agreements with the United States, wrote Derek Holt, head of Capital Markets Economics at Scotiabank, in a Monday note.

In corporate news, Toronto-Dominion Bank ( MLWIQXX ) (TD.TO, TD) unveiled a new payment platform for Canadian small and medium-sized businesses. The bank said it is offering the Clover all-in-one platform in Canada to help clients accept payments, manage their business and build customer relationships through an integrated ecosystem.

The solution, to be offered under the TD Merchants Solution banner, combines point-of-sale hardware, payment processing, e-commerce tools and business management software, a statement said.