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USD/CAD rises toward 1.4165 as Iran tensions weigh on Canada
The move reverses the pair’s four-day slide, ahead of Tuesday’s US CPI and with Canada’s June jobs report showing 18.2K employment growth.
The Canadian dollar edged lower versus the US dollar, pushing USD/CAD toward 1.4165 during Asian trading hours on Monday and snapping a four-day losing streak, according to FXStreet.
FXStreet links the currency shift to renewed risk around the US-Iran conflict after multiple US attacks in Iran tied to disrupting commercial shipping in the Strait of Hormuz, followed by retaliatory drone and missile strikes on US allies in the Middle East. The report notes Iran said the Strait of Hormuz would be closed until further notice, a development that can lift demand for safe havens like the greenback.
Focus next turns to macro data, with the US June CPI report expected later on Tuesday. FXStreet also points to Canada’s recent labor figures as a partial counterweight, saying Statistics Canada reported Canada added 18.2K jobs in June versus a 10K consensus, while the unemployment rate fell to 6.5% from 6.6% in May.
The report added that the Bank of Canada is expected to hold its overnight rate at 2.25% at its July meeting and keep it there well into next year, with the outlook for Canadian rates, oil prices, and broader risk sentiment seen as key drivers of USD/CAD.