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Canadian dollar holds near two-month highs vs US dollar as oil rises
USD/CAD trades near 1.3935, with the move supported by higher oil prices and a stronger Canadian labor market, while US rate expectations and safe-haven USD demand limit further downside.
FXStreet reports USD/CAD is trading around 1.3935 on Tuesday, near its lowest level in two months, with the pair down modestly on the day.
The Canadian dollar is supported by higher crude oil prices, amid concerns about supply in the Middle East. The outlet links the oil support to disruptions connected to tensions involving Iran, including reporting that Iran has ruled out further negotiations during President Donald Trump’s term and intends to wait until after January 20, 2029.
FXStreet also points to Canadian employment data released on Friday as additional support, saying a stronger labor market combined with rising oil helps the loonie hold its advantage against the greenback.
On the other side, the report says the US dollar remains resilient as investors still price in the possibility the Federal Reserve could raise interest rates at least once by the end of the year. The next key catalysts for USD/CAD are US inflation releases, with CPI due Wednesday and PPI Thursday, which could shape the dollar’s direction.
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