Geopolitical risks and Fed-BoC policy divergence drive the pair to multi-year highs near 1.4175.
The USD/CAD pair trades near 1.4175 in early Asian trade, close to its highest level since April 2025. Renewed tensions between Iran and the US, including Iran’s closure of the Strait of Hormuz and suspended negotiations, bolster demand for the safe-haven USD.
The Canadian Dollar remains pressured by slowing economic growth and the Bank of Canada’s dovish stance. Investors expect the BoC to hold rates steady through late 2026, while the Fed signals a potential 25-basis-point hike by year-end, widening the policy gap.
Crude Oil prices rise 2% amid supply concerns, but the CAD fails to benefit as broader risk aversion dominates.