Canadian Dollar weakens as US Dollar strengthens on rising risk aversion
USD/CAD gains ground after registering over 0.5% losses in the previous day, trading around 1.3950 during the early European hours on Monday. The pair gains ground as the US Dollar (USD) strengthens on rising safe-haven demand, driven by heightened geopolitical caution.
Over the past week, the US Dollar (USD) gained strength, with investors seeking it as a safe-haven asset amid heightened geopolitical tensions. The Middle East conflict, particularly the ongoing US-Iran standoff, has contributed to this risk aversion. Meanwhile, the Canadian Dollar (CAD) has weakened against the USD due to the health of the Canadian economy, which is buoyed by higher-than-expected job growth.
The Bank of Canada's (BoC) decision to maintain interest rates and its influence on global capital flows have also impacted the CAD's value. Oil prices, as a major export for Canada, have seen a rebound, adding to the pressure on the USD/CAD pair.
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