Canadian Dollar remains supported by rising Oil prices and US tariff pause
USD/CAD remains under pressure on Thursday even as the US Dollar (USD) stages a modest recovery following the previous day’s sharp selloff. Higher Oil prices support the commodity-linked Canadian Dollar (CAD), keeping the pair near a three-month low.
The Canadian Dollar finds stability as Oil prices climb and the US imposes a temporary halt to tariffs. The USD/CAD pair remains close to a three-month low, sitting at 1.3778, down 0.22% for the day. The Canadian Dollar benefits from stronger Oil prices, given Canada's significant role in global crude exports. Meanwhile, the US Dollar faces a slight recovery after a sharp drop the previous day.
Despite progress in trade negotiations between the US and Canada, the Loonie is supported by elevated Oil prices and the US tariff pause. The US Treasury's decision to double the size of long-dated debt buybacks adds to the Greenback's support. However, concerns over US inflation and monetary policy remain, as the Federal Reserve remains cautious about raising interest rates in September.
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