The Canadian Dollar gains as preliminary US-Iran diplomatic progress reduces demand for the US Dollar as a safe haven.
USD/CAD fell to around 1.4100 in Asian trading Thursday, snapping a five-day rally. The decline follows reports of a preliminary US-Iran memorandum of understanding, easing safe-haven demand for the USD.
The Federal Reserve’s June projections showed half of FOMC members anticipate at least one rate hike this year, supporting potential USD strength. The Fed held its benchmark rate at 3.5%-3.75% in its latest meeting, with new Chair Kevin Warsh pledging aggressive action on inflation.
The commodity-linked Canadian Dollar may also bolster the pair’s losses, though resilient US labor data and inflation pressures could limit further declines.