Rising crude prices and Middle East supply concerns support the CAD, offsetting USD strength and keeping the pair near 1.3935.
USD/CAD trades at 1.3935, down 0.03% on the day, remaining near its lowest level in two months. The Canadian Dollar gains support from higher Oil prices, driven by supply disruptions in the Middle East, including tensions over the Strait of Hormuz and Bab el-Mandeb Strait.
Geopolitical risks persist as Iran rules out negotiations with the US until January 20, 2029, dimming hopes for a swift resolution. Canadian employment data released Friday also bolstered the Loonie, reinforcing its strength against the Greenback.
The pair’s downside remains limited by broader USD resilience, though elevated Oil prices and a stronger labor market keep pressure on USD/CAD near recent lows.