Rising US-Iran tensions and strong US jobs data support the USD, offsetting oil-driven gains for the CAD.
The USD/CAD pair rose for the fourth consecutive session, approaching 1.3700 in Asian trading on Monday. A firmer US Dollar, driven by renewed geopolitical risks in the Strait of Hormuz, underpinned the move. Both the US and Iran rejected each other’s peace proposals, keeping safe-haven demand for the USD elevated.
The pair’s gains follow a sixth positive session in seven, supported by Friday’s upbeat US Nonfarm Payrolls report. The data reinforced expectations of a hawkish Federal Reserve, further bolstering the Greenback. Meanwhile, Canada’s unemployment rate climbed to 6.9% in April, weighing on the CAD.
Rising crude oil prices, fueled by persistent geopolitical uncertainties, limited further losses for the commodity-linked Loonie. However, the broader trend favored the USD amid diverging economic outlooks.