Falling crude prices pressure the Canadian dollar, offsetting USD weakness amid easing Fed rate hike bets and Iran deal hopes.
The USD/CAD pair edges higher near 1.4030, up 0.10% on the day, as declining oil prices weigh on the commodity-linked Canadian dollar. Crude prices fell after the U.S. canceled a planned strike on Iran and OPEC+ agreed to boost production by 188,000 barrels per day in September.
The move counters a broader USD sell-off, driven by short-covering in the Japanese yen and reduced expectations for an immediate Fed rate hike. The USD Index (DXY) hit its lowest level since June 17, limiting further gains for USD/CAD below 1.4000.
Traders await key U.S. economic data this week, including today’s ISM Manufacturing PMI, for fresh directional cues.