Canadian Dollar gains despite lower oil prices
USD/CAD depreciates after opening at a bullish gap, trading around 1.4000 during Asian hours on Monday.
The Canadian Dollar (CAD) experienced an increase in value despite a decline in oil prices, according to recent reports. The US Dollar (USD) depreciated due to a lack of immediate military action against Iran by US President Donald Trump and easing safe-haven demand. This shift in sentiment had a negative impact on the USD/CAD pair, as oil prices weakened and limited the downside of the currency pair.
Royal Bank of Canada analysts point out that domestic demand remains weak, with housing markets struggling heading into late-summer data reports. They also mention that the August GDP figures, due next Friday, should confirm a slowdown in Q3 growth after a surge in Q2, further supporting their belief that the economy has decelerated following earlier activity.
Traders are now focusing on the upcoming Federal Reserve policy decision, with a 90.6% probability of a rate pause at the October 27–28 meeting and a 79.7% chance of a hike in December, as indicated by the CME FedWatch Tool. The CAD's key factors driving its value include interest rates set by the Bank of Canada (BoC), oil prices, the health of the economy, inflation, and the Trade Balance.
Higher oil prices and a stronger economy can positively influence the CAD, while weaker economic indicators may lead to its depreciation.
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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