USD/CAD pares losses near 1.3900 after Israel-Lebanon ceasefire progress eases geopolitical risks, though Fed hike bets cap gains.
The Canadian Dollar trimmed losses against the US Dollar on Thursday, rebounding from an eight-week low as optimism over Middle East peace talks improved risk sentiment. USD/CAD fell from session highs of 1.3925 to trade just above 1.3900, though it remains up 0.8% for the week.
Lebanon’s President confirmed progress on a ceasefire agreement with Israel, raising hopes for broader regional stability. However, subdued risk appetite persists amid stalled US-Iran negotiations. Meanwhile, strong US economic data, including ADP employment and ISM Services PMI, bolstered expectations for a near-term Federal Reserve rate hike.
Markets now await US jobless claims and Friday’s Nonfarm Payrolls report, which is forecast to show 85K new jobs in May. Canadian employment data for May will also be released simultaneously, adding to the week’s macro focus.