USD/CAD gains ground for the third successive day, trading around 1.4210 during the European hours on Tuesday.
The pair appreciates as the US Dollar (USD) holds ground, which could be attributed to the renewed geopolitical tensions in the Strait of Hormuz
However, the upside of the Greenback could be restrained as traders price out any Federal Reserve rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated. Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook.
The upside of the USD/CAD pair could be capped as the commodity-linked Canadian Dollar (CAD) gains support from higher oil prices. Although Canada is a major crude exporter, lower oil prices diminish foreign capital inflows, ultimately weighing on the loonie dollar. West Texas Intermediate (WTI) oil price gains ground after registering modest losses in the previous day, trading around $69.40 per barrel at the time of writing.