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USD/CAD steadies near 1.3925 as oil rebounds and Fed bets firm
The rebound comes as investors look past a disappointing US Nonfarm Payrolls report, while Fed rate-hike expectations and oil support keep the US dollar bid.
FXStreet reports USD/CAD is finding support at the start of the week, with spot prices climbing back above the mid-1.3900s area after recovering part of Friday’s heavy losses to about 1.3925.
The article attributes the move to diverging forces: a geopolitics-driven safe-haven bid for the US dollar linked to the US-Iran standoff, and expectations the Federal Reserve could raise borrowing costs by the end of the year amid inflation risks from recovering crude oil prices.
At the same time, uncertainties around the reopening of the Strait of Hormuz are keeping crude prices supported, which can benefit the Canadian dollar because oil is Canada’s largest export. FXStreet also notes that an upbeat Canadian jobs report released on Friday could limit traders from pressing aggressive bullish bets on USD/CAD.
On the technical side, FXStreet says holding above the 100-day Simple Moving Average near 1.3917 suggests underlying demand is cushioning dips, while a break lower would open the door to a deeper correction. The article adds that traders may wait for this week’s US inflation data and additional Middle East developments to gain clearer direction.
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