The Canadian Dollar weakens as USD strengthens amid Fed rate hike expectations and geopolitical developments.
The USD/CAD pair rose to 1.3755 in early European trading on Friday, extending its weekly gain to the largest in over two months. The move follows rising energy prices, which have fueled inflation concerns and bolstered expectations of a Federal Reserve rate hike.
The pair’s advance reflects broader USD strength, supported by recent discussions between U.S. and Chinese leaders. Markets are pricing in tighter monetary policy as inflationary pressures persist, weighing on risk-sensitive currencies like the CAD.
No immediate market reaction data was provided, but the trend underscores shifting expectations for central bank policy in the coming months.