The Canadian dollar strengthens against the USD amid rebounding oil prices and fading expectations of further Federal Reserve rate increases.
The USD/CAD pair declined during Thursday’s Asian session, nearing the 1.4000 level as crude oil prices recovered from a three-week low. Attacks on Saudi oil tankers in the Red Sea raised supply disruption concerns, supporting the commodity-linked Canadian dollar.
Investors also scaled back bets on further Federal Reserve rate hikes, weakening the USD. Diplomatic optimism over a potential US-Iran peace deal added pressure, with Iran and Oman reportedly close to finalizing a shipping framework for the Strait of Hormuz.
Traders remain cautious ahead of Friday’s US Nonfarm Payrolls and Canadian employment reports, which could provide fresh direction for the currency pair.