- USD/CAD reached a 14-month high of 1.4191 on Monday.
- The Greenback rises on increased safe-haven demand amid renewed US-Iran peace deal concerns.
- The Canadian Dollar falls as Oil prices drop following a 60-day US-Iran peace roadmap brokered by Qatar and Pakistan.
USD/CAD extends its gains for the fifth successive day, trading around 1.4190 during the Asian hours on Monday. The pair hits a 14-month high of 1.4191 as the US Dollar (USD) receives support from safe-haven demand, which could be attributed to renewed concerns over a US-Iran peace deal. Traders will likely observe Canada’s Consumer Price Index (CPI) data due later in the North American session.
CNBC reported on Sunday that US President Donald Trump threatened direct strikes on Iran if Hezbollah continues its attacks on Israel. This warning has severely clouded the outlook for diplomatic progress between Washington and Tehran, completely dismantling the current peace framework, even as Vice President JD Vance met with Iranian officials for the first round of talks under an interim deal.
Meanwhile, Tehran simultaneously announced it had once again closed the strategic Strait of Hormuz. While Iranian state media reported that Tehran had completely suspended negotiations in response to Trump’s remarks, sources close to the matter indicated that discussions are quietly ongoing.
Moreover, the Greenback receives support as the Federal Reserve (Fed) adopted a decidedly hawkish tone after keeping interest rates steady last week. Notably, 9 out of 19 Fed policymakers now project at least one interest rate hike this year, with market investors pricing in a potential increase as early as September.
As Canada’s largest crude exporter to the United States (US), the commodity-linked Canadian Dollar (CAD) faced downward pressure from falling oil prices. Crude surrendered its daily gains following positive developments in the US-Iran peace talks. Mediators Qatar and Pakistan announced in a joint statement from Switzerland that both nations have agreed to a formal roadmap aimed at securing a final peace agreement within the next 60 days.
