Easing risk sentiment and progress in US-Iran negotiations pressure the USD, halting its four-day rally against the CAD near 1.3990.
The USD/CAD pair retreated to around 1.3990 in Asian trading, ending a four-day winning streak as the US Dollar faced downward pressure. Growing expectations of a US-Iran peace deal, with preliminary agreements reportedly near release, reduced risk aversion and weighed on the greenback.
Investors had previously driven the USD higher amid broader market caution, but optimism over diplomatic progress shifted sentiment. Meanwhile, the Canadian Dollar’s upside remains limited by lower oil prices, a key export for Canada. Market focus now turns to the Federal Reserve’s policy decision later today.
The Fed is widely anticipated to hold interest rates steady at 3.50%-3.75%, with traders scrutinizing Chair Kevin Warsh’s guidance for future monetary policy direction.