The Canadian Dollar gains against the USD as risk aversion wanes, though lower oil prices limit CAD upside.
USD/CAD declined to around 1.4080 in Asian trading Monday, retreating after a brief rebound as easing US-Iran tensions weighed on the US Dollar. The pair fell despite a 5% drop in WTI crude to $84.50 per barrel, which pressured the commodity-linked Canadian Dollar.
The pullback followed a 13-day escalation between the US and Iran, though markets remain wary of supply risks from Houthi attacks in Yemen. Reports indicated the US paused strikes due to dwindling interceptor supplies and limited remaining targets in Iran.
Investors await Wednesday’s Fed meeting, where rates are expected to hold steady before potential hikes in September. The CAD’s gains were tempered by oil’s bearish open, reflecting broader market caution.