USD/CAD edges lower on Wednesday as a mildly softer US Dollar (USD) and rising Oil prices help the Canadian Dollar (CAD) snap a two-day losing streak.
At the time of writing, the pair trades around 1.4085, down 0.16% on the day
Higher Oil prices typically support the commodity-linked Loonie, given Canada’s position as a major crude exporter. West Texas Intermediate (WTI) trades around $86.00, near its highest level since June 11. Oil prices are rising as fighting in the Middle East disrupts shipping through the Strait of Hormuz, while threats from Yemen’s Ansar Allah raise fresh supply concerns in the Red Sea.
US President Donald Trump issued a fresh warning to Iran on Wednesday, threatening strikes on the country’s infrastructure if Tehran targets vessels in the Strait of Hormuz. The US Dollar trades slightly lower on the day but remains supported by geopolitical tensions and hawkish Fed expectations, as higher Oil prices add to inflation risks. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 101.12, down 0.08% on the day.