Canadian Dollar outperforms US Dollar as geopolitical tensions boost Oil
USD/CAD falls 0.24% on Monday and trades around 1.3870 at the time of writing, after reaching its highest level in more than two weeks earlier. The pair comes under pressure from both a stronger Canadian Dollar (CAD), supported by rising Oil prices, and a modest pullback in the US Dollar (USD).
TD Securities analysts forecast the Bank of Canada (BoC) will adopt a dovish tone and deliver limited guidance during a meeting as trade tensions escalate with the United States. They view the Bank as relatively passive, leaving the Canadian Dollar (CAD) exposed as a funding currency. Although TD Securities maintains a 1.39 year-end forecast, they doubt the USD/CAD pair can stay above 1.40 in a bearish USD environment.
The BoC's role will be crucial as markets await updates from the Bank following US tariff announcements. Sidelined, the BoC leaves the CAD vulnerable as a funding currency, with the Norwegian Krone (NOK) and Mexican Peso (MXN) supported more by carry and cleaner macro factors. Meanwhile, other currencies face their own challenges: GBP/USD loses momentum after reaching 1.3550, while EUR/USD holds steady around 1.1600 amid Middle East tensions.
Gold nears $4,450 in European trading, buoyed by a softer USD and Fed Chair Kevin Warsh's hawkish comments. Dogecoin, meanwhile, struggles near $0.081 following a 12% decline last week, with mixed technical signals and profit-taking among large holders. The oil market remains mixed, with a record US diesel crack spread indicating underlying volatility.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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