USD/CAD trims part of its earlier losses on Thursday as the US Dollar (USD) stages a modest recovery following the previous day’s sharp selloff.
However, the pair stays on the back foot as higher Oil prices support the commodity-linked Canadian Dollar (CAD)
At the time of writing, USD/CAD trades around 1.3780, hovering near a three-month low. The Loonie also draws support from signs of progress in trade talks between the United States and Canada. US President Donald Trump has paused planned 50% tariffs on around $20 billion worth of Canadian goods for three days, saying the two countries have a deal.
Meanwhile, Oil prices stay elevated as the US-Iran standoff keeps supply concerns in focus. West Texas Intermediate (WTI) trades around $85.80 per barrel, up nearly 5% so far this week. The Canadian Dollar is highly sensitive to Oil prices because Canada is a major crude exporter.