Falling crude prices and US-Iran negotiation hopes weigh on the Canadian Dollar, lifting the USD/CAD pair near 1.4030.
The USD/CAD pair climbed to 1.4030 in early European trading Monday, driven by a sharp decline in crude oil prices. The drop in oil, a key Canadian export, weakened the commodity-linked Loonie against the US Dollar.
Oil prices fell on expectations of renewed US-Iran talks, reducing fears of supply disruptions. Canada’s status as a major oil exporter amplifies the Loonie’s sensitivity to crude price movements. Later Monday, the US ISM Manufacturing PMI will be released, with Friday’s Nonfarm Payrolls data also in focus.
Markets have priced in a 64.7% chance of a Fed rate hike in September, down from 77% before the July meeting. Stronger-than-expected US jobs data could bolster the Greenback further.