USDCAD falls to 1.3900, reversing all June-July gains as oil-linked terms-of-trade shifts outweigh geopolitical risks.
The Canadian dollar surged to 1.3900 against the US dollar, its highest level since mid-June, erasing two months of gains in ten trading sessions. The move marks a fourth consecutive lower close for USDCAD, with Monday’s 35-pip range contained within Friday’s lows.
The last time USDCAD traded at these levels was 43 sessions ago, when the Strait of Hormuz closure initially boosted the greenback as a haven. Now, the same geopolitical tension lifts the loonie, as higher oil prices benefit Canada’s terms of trade. The shift contrasts with June’s reaction, when inflation concerns dominated.
Spot CAD now stands at 71.8 US cents, nearly a full cent stronger than the Bank of Canada’s 71-cent assumption in its July Monetary Policy Report. The gap is the widest since the forecast was published.