Canadian Dollar weakens as Oil prices slide on US-Iran deal hopes
- USD/CAD reverses earlier losses as falling Oil prices weigh on the Canadian Dollar.
- Lower Oil prices ease rate-hike pressure on both the Fed and Bank of Canada.
- Traders await US and Canadian employment data for fresh policy clues.
USD/CAD reverses its earlier losses on Tuesday as falling Oil prices weigh on the commodity-linked Canadian Dollar (CAD) following comments from US Treasury Secretary Scott Bessent on US-Iran talks.
At the time of writing, the pair trades around 1.4068, marking a fresh weekly high.
“We are in talks with the Iranians,” Bessent told CNBC’s Squawk Box. “There is a chance we may have a deal today or tomorrow to open the strait of Hurmoz and move towards a more normalized position in this conflict.”
The US Dollar (USD) weakened slightly following the remarks, but the decline in Oil prices outweighed the move and left the Canadian Dollar under pressure. The Loonie is sensitive to Oil price movements because Canada is a major exporter of Oil.
West Texas Intermediate (WTI) trades around $75.50, down nearly 4% on the day and at its lowest level since July 13.
Lower Oil prices also ease energy-driven inflation pressures, reducing the need for central banks to maintain restrictive monetary policy or consider raising interest rates.
For the Federal Reserve (Fed), the decline in energy prices has weakened expectations of a September rate hike, with the CME FedWatch Tool showing the probability falling to 58.9% from 67.2% a day earlier.
"We need a mildly restrictive monetary policy, and the Fed likely has that now," Chicago Fed President Anna Paulson said, adding that "inflation is too high; we want to bring it down."
Meanwhile, Lower Oil prices could also take pressure off the Bank of Canada (BoC). The central bank previously warned that persistently high energy costs could require consecutive rate hikes.
Looking ahead, traders await labour market data from both the United States and Canada. US JOLTS Job Openings are due on Tuesday, followed by ADP Employment Change on Wednesday, while US Nonfarm Payrolls and Canadian employment figures will be released on Friday.
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.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.09% | 0.16% | 0.15% | -0.52% | -0.29% | -0.21% | |
| EUR | 0.09% | -0.02% | 0.27% | 0.24% | -0.43% | -0.23% | -0.11% | |
| GBP | 0.09% | 0.02% | 0.28% | 0.26% | -0.41% | -0.21% | -0.10% | |
| JPY | -0.16% | -0.27% | -0.28% | -0.02% | -0.68% | -0.50% | -0.26% | |
| CAD | -0.15% | -0.24% | -0.26% | 0.02% | -0.66% | -0.47% | -0.35% | |
| AUD | 0.52% | 0.43% | 0.41% | 0.68% | 0.66% | 0.20% | 0.32% | |
| NZD | 0.29% | 0.23% | 0.21% | 0.50% | 0.47% | -0.20% | 0.13% | |
| CHF | 0.21% | 0.11% | 0.10% | 0.26% | 0.35% | -0.32% | -0.13% |
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).
