Rising US Treasury yields support the USD, but elevated oil prices bolster the CAD, keeping the pair stable near mid-June levels.
USD/CAD remains little changed at around 1.3874, balancing a firmer US Dollar against rising oil prices that support the Canadian Dollar. The 10-year US Treasury yield climbed toward 4.75%, while the 30-year yield hit its highest since 2007, aiding the USD’s modest recovery.
The US Dollar Index (DXY) rose 0.10% to 99.67, recovering from two-month lows. However, analysts note the CAD’s performance remains tied to oil, with West Texas Intermediate (WTI) crude trading at $84.25 per barrel after a 3.15% gain on Monday.
Canada’s July CPI accelerated to 3.0% YoY from 2.8% in June, but the data did not shift expectations for the Bank of Canada. The CAD’s resilience reflects its commodity-linked nature amid persistent inflation concerns.