Rising crude prices bolster the Canadian Dollar after Houthi attacks disrupt Red Sea oil shipments, pressuring the USD/CAD pair.
The USD/CAD pair fell to 1.4075 in early European trading Friday, weighed by surging oil prices amid escalating Middle East conflicts. Yemen’s Iran-backed Houthi rebels targeted oil tankers in the Red Sea, threatening a key export route and lifting crude prices, which support the commodity-linked CAD.
Canada’s status as a major oil exporter ties the Loonie’s strength to crude prices. The pair remains above its 100-day Simple Moving Average but slipped below the 20-day Bollinger SMA, signaling near-term momentum loss. The 14-day RSI at 47.9 suggests indecisive trading ahead.
Later Friday, US S&P Global PMI data may influence the USD’s trajectory. Stronger-than-expected readings could curb the Greenback’s losses, while weak data may extend the CAD’s gains.