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Dollar and CAD rise together as Brent tops $100 again
Brent rebounded above $100 after traders shifted from whether Iran’s Hormuz offer is credible to how quickly any deal could restore oil flows, while a hawkish Fed week kept USD/CAD edging higher.
Brent completed a round trip, sliding into the low $98s before recovering back above $100 as traders reassessed the Strait of Hormuz situation, with attention moving from whether Iran’s diplomatic offer is real to how long an agreement could take to restore actual oil flows. Action Forex said CAD strengthened broadly alongside the oil rebound, but USD/CAD still ticked higher due to additional dollar support.
The dollar’s extra tailwind came from a hawkish week of Fed commentary that kept odds elevated for an October hike, helping USD outperform CAD even as higher oil lifted Canada-linked currencies. The outlet described this as creating an unusually clear FX setup, where oil strength supports CAD, while rate expectations allow the dollar to still grind higher versus CAD.
Action Forex added that the market appears to give more credibility to the diplomatic opening, while still seeing a wide gap between talks and restored oil supplies. It pointed to Reuters reporting that Iran could reopen Hormuz within seven days if Washington eases military pressure and lifts its blockade on Iranian ports.
Still, the story notes that fast resolution remains uncertain, with Iran signaling it wants the U.S. to move first on the blockade and other demands, and Trump saying he expected a deal only after the November midterm elections. Military rhetoric has also continued alongside diplomacy, helping explain why Brent’s rebound looked more nuanced than Tuesday’s drop suggested.
Latest closeBrent $97.67 ▼1.6%