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USD/CAD holds near 1.4030 as oil slides and risk factors shift
The Canadian dollar is pressured as crude oil falls after Trump cancelled a threatened Iran attack, while traders also weigh upcoming US and Canada employment data.
FXStreet reports USD/CAD starts the week around 1.4030, rising less than 0.10% for the day but lacking strong momentum and staying within Friday’s broader range.
The dollar Capped gains as crude oil tumbled following President Donald Trump cancelling a threatened attack on Iran, saying Middle East allies reached parameters of a deal to end the five-month-old war. Pressure also came after OPEC+ agreed to increase production by 188,000 barrels per day in September, which weighs on the commodity-linked loonie.
At the same time, an intraday slump in oil eased inflation concerns and tempered expectations for an immediate US Federal Reserve rate hike. FXStreet also notes follow-through short covering around the Japanese yen dragged the US Dollar Index to its lowest level since June 17, adding caution for USD/CAD bulls.
Looking ahead, market participants are focused on US and Canada macroeconomic releases due this week, starting with the ISM Manufacturing PMI and then monthly employment reports from both countries on Friday, which are expected to influence USD/CAD near term. FXStreet says further Middle East developments could add volatility as well.
Latest closeWTI crude $86.80 ▲3.8%|Dollar index 99.80 ▼0.2%