Canadian Dollar gains on higher oil prices, weaker US Dollar
USD/CAD extends its losses for the second successive day, trading around 1.3800 during the Asian hours on Thursday. The pair declines as the commodity-linked Canadian Dollar (CAD) receives support from improved oil prices.
Canada's currency, the Canadian Dollar (CAD), has appreciated due to a combination of higher oil prices and a weaker US Dollar (USD). Oil prices have surged due to escalating tensions between the US and Iran, which have expanded to the Strait of Hormuz. This geopolitical backdrop adds an element of risk to oil markets, supporting the risk premium for Brent crude.
As a commodity-linked currency, the CAD benefits from improved oil prices. Meanwhile, the US Dollar has declined due to recent economic data and expectations of slower interest rate hikes from the Federal Reserve. The Bank of Canada (BoC) influences the CAD through its interest rate decisions, which aim to maintain inflation at 1-3%.
Higher interest rates tend to be positive for the Canadian Dollar, while stronger economic data also supports the currency. The US economy's health, as the CAD's largest trading partner, also plays a crucial role in the CAD's value.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 2 other outlets
- Canadian Dollar gains traction on fading Fed rate hike bets, US-Canada tariff pause fxstreet.com
- Dollar gains on black market e.vnexpress.net
