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Canadian Dollar weakens despite higher oil prices

  • USD/CAD rises as the US Dollar holds gains amid renewed geopolitical tensions in the Strait of Hormuz.
  • The Greenback’s upside could be restrained as traders price out any Fed rate hike for this month and September.
  • The commodity-linked Canadian Dollar may gain support from higher oil prices.

USD/CAD gains ground for the third successive day, trading around 1.4210 during the European hours on Tuesday. The pair appreciates as the US Dollar (USD) holds ground, which could be attributed to the renewed geopolitical tensions in the Strait of Hormuz.

However, the upside of the Greenback could be restrained as traders price out any Federal Reserve rate hikes this month and in September. This shift in sentiment followed a cooling employment report that revealed fewer jobs added across April, May, and June than Wall Street had anticipated.

Furthermore, a recent drop in crude oil prices, driven by an OPEC+ production boost and a US-Iran peace deal, has alleviated broader inflationary pressures, softening the urgency for an aggressive Fed policy outlook.

The upside of the USD/CAD pair could be capped as the commodity-linked Canadian Dollar (CAD) gains support from higher oil prices. Although Canada is a major crude exporter, lower oil prices diminish foreign capital inflows, ultimately weighing on the loonie dollar.

West Texas Intermediate (WTI) oil price gains ground after registering modest losses in the previous day, trading around $69.40 per barrel at the time of writing. Crude oil prices received a temporary boost following reports that Iran fired at least two missiles at commercial vessels transiting the strategic waterway late Monday.

While two ships sustained significant damage, no casualties were reported. Separately, the UK Maritime Trade Operations (UKMTO) confirmed that a southbound tanker was struck on its port side by an unknown projectile, which ignited a fire on board.

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Canadian Dollar weakens despite higher oil prices

  • USD/CAD may decline as the commodity-linked Canadian Dollar may receive support from higher oil prices.
  • OPEC+ approved an 188,000-barrel-per-day output hike led by Saudi Arabia and Russia, signaling confidence in regional stability.
  • The US Dollar strengthens as markets expect multiple Fed rate hikes this year.

USD/CAD gains ground for the second consecutive day, trading around 1.4210 during the Asian hours on Monday. The upside of the pair could be restrained as the commodity-linked Canadian Dollar (CAD) could receive support from higher oil prices.

Oil traders are moving cautiously while traffic through the Strait of Hormuz appears to be stabilizing; expected production hikes from OPEC+ (The Organization of Petroleum Exporting Countries and its allies (OPEC+), including Russia) have renewed fears of a global supply glut.

Several tankers made unexplained detours on Saturday, and shipping lanes through the critical chokepoint normalized by Sunday. Meanwhile, OPEC+ approved a modest output hike of 188,000 barrels per day for next month, led by Saudi Arabia and Russia, a move signaling confidence in regional stability.

The USD/CAD pair appreciates as the US Dollar (USD) rises, as traders expect multiple Federal Reserve (Fed) rate hikes later this year. This comes despite easing global inflation concerns, which have been helped by oil flows normalizing through the critical Strait of Hormuz.

The CME FedWatch tool shows financial markets are pricing in a 77.3% chance of interest rate hikes by year-end. Investors are now looking ahead to Wednesday’s release of the Fed’s June policy Meeting Minutes to gain clearer insights into the future path of interest rates.

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CAD languishes near YTD low as USD bulls keenly await US NFP report

  • USD/CAD remains close to a 14-month high amid a combination of supporting factors.
  • Oil prices hit a four-month low amid easing supply concerns, undermining the Loonie.
  • The BoC-Fed policy divergence favors bulls amid a firmer USD and ahead of the US NFP.

The USD/CAD pair consolidates above the 1.4200 mark during the Asian session on Thursday as traders opt to wait for the release of the crucial US monthly employment details before positioning for any further gains. Spot prices, however, remain close to the highest level since April 2025 amid a combination of supporting factors.

Crude Oil prices have dropped to a fresh low since late February as the resumption of shipping traffic through the Strait of Hormuz eased fears of a prolonged supply shock. Adding to this, the Bank of Canada (BoC) maintained a dovish stance as policymakers are prioritizing a sluggish economy over inflation threats. This, in turn, continues to undermine the commodity-linked Canadian Dollar (CAD), which, along with a bullish US Dollar (USD), continues to act as a tailwind for the USD/CAD pair.

The US ADP report showed on Wednesday that private-sector employment increased by 98K in June, down from the previous month’s unrevised 122K and missing estimates for a reading of 113K. Adding to this, the ISM Manufacturing PMI eased to 53.3 in June from 54 in the previous month. The data, however, does little to temper Federal Reserve (Fed) rate-hike bets. Moreover, lingering geopolitical risks continue to act as a tailwind for the USD, which, in turn, supports the USD/CAD pair.

In fact, Iran and the US concluded ​a round of indirect talks in Qatar with no sign that they have made headway toward a lasting peace agreement amid tensions over the critical Strait of Hormuz. Separately, Russia launched a barrage of missiles and drones on Ukraine’s capital, Kyiv, early this Thursday. This keeps geopolitical risks in play and favors the USD bulls. Apart from this, the divergent BoC-Fed policy expectations suggest that the path of least resistance for the USD/CAD pair is to the upside.

Traders, however, seem hesitant ahead of the US Nonfarm Payrolls (NFP) report, due later during the North American session. The closely-watched data will play a key role in influencing market expectations about the Fed’s policy path and drive the USD demand. Furthermore, Oil price dynamics might continue to produce some short-term trading opportunities around the USD/CAD pair.

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Canadian Dollar weakens as geopolitical uncertainty lifts US Dollar

  • USD/CAD rises as safe-haven demand boosted the US Dollar amid uncertainty surrounding the US-Iran peace talks in Doha.
  • US envoys arrived in Qatar for Iran peace talks, but Tehran refused direct meetings, clouding prospects for a deal.
  • The commodity-linked CAD struggles as Crude oil prices decline on easing supply concerns.

USD/CAD has recovered its recent losses from the previous day, trading around 1.4220 during the Asian hours on Wednesday. The pair appreciates as the US Dollar (USD) gains ground on safe-haven demand amid uncertainty over United States (US)-Iran Doha talks.

US negotiators Jared Kushner and Steve Witkoff arrived in Qatar on Tuesday to meet with mediators regarding the implementation of an initial peace deal to end the conflict with Iran. However, Tehran stated it would not meet directly with the US envoys, clouding prospects for a lasting resolution and keeping geopolitical risk premiums alive in the market.

The Greenback received a boost from rising hawkish sentiment surrounding the Federal Reserve’s policy outlook. At its June meeting, the Fed held its benchmark interest rate steady at a target range of 3.50% to 3.75% while notably removing language that hinted at future rate cuts. According to the CME FedWatch tool, Fed funds futures are now pricing in a nearly 63% chance of an interest rate hike by September.

The USD/CAD pair also rises as the commodity-linked Canadian Dollar (CAD) faces challenges due to lower oil prices. Crude oil prices decline as traders weigh in on potential peace talks in Doha between the US and Iran.

Both nations are working toward a lasting resolution to ease tensions in the Strait of Hormuz following recent military clashes. However, Tehran maintains its firm stance on controlling maritime traffic through the strategic waterway; both sides have halted their exchange of fire, allowing oil tanker traffic and shipments to steadily recover.

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USD/CAD Price – Holds gains above 1.4200, bullish trend intact despite overbought signals

  • USD/CAD gains momentum to near 1.4235 in Tuesday’s early European session.
  • The pair keep the bullish vibe, but further consolidation cannot be ruled out with the overbought RSI. 
  • The first upside barrier emerges at 1.4310; the initial support level to watch is 1.4169.

The USD/CAD pair trades in positive territory around 1.4235 during the early European trading hours on Tuesday. The growing chances of Federal Reserve (Fed) interest rate hikes and optimism about the US economy provide some support to the US Dollar (USD) against the Canadian Dollar (CAD).

The key US jobs data for June will be in the spotlight later on Thursday. This report could give traders a greater sense of how accurately markets are pricing the chances of Fed rate hikes this year. Money markets showed traders fully expect one rate hike this year, with a roughly 50% chance of a second, according to LSEG data.

Crude oil prices have edged lower following a 60-day interim ceasefire agreement between the US and Iran. Traders will closely monitor the US-Iran peace talks in Doha, Qatar, later in the day. Positive developments surrounding the ceasefire deal could drag the crude oil prices lower. It is worth noting that Canada is a major oil-exporting country, and lower crude oil prices generally have a negative impact on the Canadian Dollar (CAD). 

Chart Analysis USD/CAD

Technical Analysis:

In the daily chart, USD/CAD remains in a bullish near-term bias as spot holds above the 100-day Simple Moving Average (SMA) and the Bollinger middle band, reinforcing an underlying uptrend. The Relative Strength Index (14) stands at 82.4 sits in overbought territory, hinting that the latest advance could be stretched.

On the topside, immediate resistance is located at the Bollinger upper band at 1.4310, where buyers may hesitate to extend gains. On the downside, initial support is seen at the June 26 low of 1.4169, followed by the Bollinger middle band around 1.4068, before deeper demand emerges at the lower band near 1.3825 and the 100-day SMA at 1.3793, which together mark a more substantial structural floor.

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USD/CAD Price – Holds losses below 1.4200 within overbought zone

  • USD/CAD may rebound toward the initial barrier at the 14-month high of 1.4248.
  • The 14-day Relative Strength Index of 75.3 signals overbought conditions, hinting that the recent advance is vulnerable to a near-term corrective pullback.
  • The pair may find primary support at the nine-day EMA of 1.4155.

USD/CAD loses ground for the third successive day, trading around 1.4180 during the early European hours on Monday. The pair continues its losing streak after pulling back from 14-month highs. The technical analysis of the daily chart indicates the pair is remaining within the ascending channel pattern, signaling an ongoing bullish bias.

The USD/CAD pair is retaining a bullish near-term bias as it holds above both the nine-day and 50-day Exponential Moving Averages (EMAs). The alignment of price above these short- and medium-term EMAs suggests ongoing upside pressure, although the 14-day Relative Strength Index (RSI) at 75.3 signals overbought conditions, hinting that the latest advance could be vulnerable to consolidation or a corrective pullback.

The USD/CAD pair may rebound toward the 14-month high of 1.4248, reached on June 24, aligned with the upper boundary of the ascending channel. A sustained break above this confluence resistance zone would open the door for further gains toward 1.4400.

The primary support lies at the nine-day EMA of 1.4155. A break below the short-term price average would weaken the price momentum and put downward pressure on the pair to test the lower boundary of the ascending channel around 1.4020. Further declines would explore the region around the 50-day EMA at 1.3924.

Chart Analysis USD/CAD
USD/CAD: Daily Chart

(The technical analysis of this story was written with the help of an AI tool.)

Canadian Dollar Price Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD-0.21%-0.17%0.03%-0.09%-0.09%-0.27%-0.13%
EUR0.21%0.04%0.26%0.11%0.14%-0.06%0.08%
GBP0.17%-0.04%0.21%0.08%0.08%-0.12%0.04%
JPY-0.03%-0.26%-0.21%-0.12%-0.14%-0.34%-0.17%
CAD0.09%-0.11%-0.08%0.12%-0.01%-0.21%-0.07%
AUD0.09%-0.14%-0.08%0.14%0.00%-0.19%-0.04%
NZD0.27%0.06%0.12%0.34%0.21%0.19%0.16%
CHF0.13%-0.08%-0.04%0.17%0.07%0.04%-0.16%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

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Euro steadies against Canadian Dollar after paring recent losses

  • EUR/CAD recovers its daily losses on ECB rate hike bets.
  • ECB policymaker Isabel Schnabel stated that monetary tightening is not over.
  • The Canadian Dollar may struggle as the BoC is expected to hold interest rates steady all year.

EUR/CAD remains flat after paring intraday losses, trading around 1.6150 during the European hours on Friday. The currency cross receives support as the Euro (EUR) gains ground following European Central Bank (ECB) policymaker Isabel Schnabel’s comments, reiterating on Thursday that the central bank’s monetary tightening cycle is not yet over.

While acknowledging that short-term economic conditions have outpaced expectations, Schnabel warned that a recent ceasefire should not prompt policymakers to lower their guard. She emphasized that, from today’s perspective, further interest rate hikes will be necessary to steer inflation back down to the ECB’s 2% medium-term target.

However, ECB President Christine Lagarde noted earlier this week that the central bank can avoid aggressive policy reactions to geopolitical spillovers from the Middle East. While Lagarde acknowledged that the Eurozone’s inflation shock is too significant to ignore, she emphasized it remains insufficient to drive up long-term inflation.

The EUR/CAD cross may further advance as the commodity-linked Canadian Dollar’s (CAD) upside could be capped as the Bank of Canada (BoC) is expected to hold interest rates steady for the remainder of the year.

According to the minutes from the BoC’s policy meeting, the governing council agreed to keep its monetary policy nimble to respond to the simultaneous risks of new US trade restrictions and volatile energy prices. Reflecting this cautious outlook, Reuters data shows traders have sharply scaled back expectations for further tightening, now pricing in just 17 basis points by December, down from 60 basis points last month.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.06%-0.03%-0.08%-0.05%0.26%0.05%-0.16%
EUR0.06%0.01%-0.02%0.03%0.31%0.07%-0.10%
GBP0.03%-0.01%-0.02%-0.02%0.30%0.08%-0.12%
JPY0.08%0.02%0.02%0.02%0.32%0.08%-0.09%
CAD0.05%-0.03%0.02%-0.02%0.30%0.06%-0.13%
AUD-0.26%-0.31%-0.30%-0.32%-0.30%-0.22%-0.42%
NZD-0.05%-0.07%-0.08%-0.08%-0.06%0.22%-0.18%
CHF0.16%0.10%0.12%0.09%0.13%0.42%0.18%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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Canadian Dollar strengthens as US Dollar decline despite hawkish Fed outlook

  • USD/CAD loses ground as the US Dollar weakens despite rising expectations of later Fed rate hikes.
  • CME FedWatch tool indicates that markets are now pricing in an 83.1% probability of rate hikes by the end of December.
  • The Canadian Dollar struggles as easing US-Iran tensions cool the global oil market.

USD/CAD halts its winning streak that began on June 10, trading around 1.4230 during the Asian hours on Thursday. The currency pair depreciate as the US Dollar (USD) declines despite rising market expectations of Federal Reserve (Fed) interest rate hikes later this year.

Traders are positioning for tighter monetary policy after Federal Reserve Chairman Kevin Warsh signaled a firm focus on taming inflation, noting that the broader economy remains on a stable footing. Reflecting this hawkish shift, the CME FedWatch tool shows that markets are now pricing in an 83.1% probability of rate hikes by the end of December.

Traders focus now shifts to the upcoming US Personal Consumption Expenditures (PCE) data release, where headline inflation is expected to heat up to 4.1% YoY in May from April’s 3.8%, and core PCE is projected to edge higher to 3.4% YoY.

The commodity-linked Canadian Dollar (CAD) is struggling against its US counterpart as easing geopolitical tensions between the US and Iran cool the global oil market. Lower crude prices directly hit the Canadian economy, as Canada is the largest exporter of crude oil to the United States.

Global oil supplies are rapidly improving following breakthrough progress in US-Iran peace efforts, which has restored shipping confidence and encouraged tankers to transit the critical Strait of Hormuz with their tracking signals activated.

Underscoring this supply surge, US Energy Secretary Chris Wright stated at the Reuters Global Energy Forum in New York that roughly 20 million barrels of oil exited the Strait within a single 24-hour window, marking a clear return to normal operational flows.

Shipping data confirms this rebound, showing that three previously stranded tankers carrying 5 million barrels of crude finally exited the Gulf on Wednesday under the interim diplomatic deal. Available supply is expected to expand even further due to a temporary US waiver that permits the purchase of already-loaded Iranian oil.

Compounding the pressure on the Canadian Dollar, Canada’s 10-year government bond yield fell to a three-month low of 3.36% in late June, as signs of cooling underlying domestic inflation reinforce expectations that the Bank of Canada (BoC) will refrain from raising interest rates for the rest of the year.