Canadian Dollar retreats as volatile Oil prices overshadow hawkish BoC remarks

USD/CAD rebounds as the Canadian Dollar gives up earlier gains amid volatile Oil prices.
BoC Governor Tiff Macklem signals further rate hikes may be needed as inflation risks persist.
Stronger US jobs data support the US Dollar, while traders await Canadian and US employment reports on Friday.

USD/CAD regains ground on Tuesday as the Canadian Dollar (CAD) surrenders earlier gains amid a firmer US Dollar (USD) and swings in Oil prices. Traders also assess hawkish remarks from Bank of Canada (BoC) Governor Tiff Macklem. At the time of writing, the pair trades around 1.3993, virtually unchanged after recovering from an intraday low of 1.3950.

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Canada is a major crude exporter, leaving the Loonie sensitive to Oil price movements. Crude rose earlier on Tuesday after the Wall Street Journal (WSJ) reported a US strike on Iran’s Qeshm Island, before falling on unconfirmed reports that Washington and Tehran have made concessions over Iran’s nuclear program and frozen funds. West Texas Intermediate (WTI) has since recovered some ground and trades flat around $95 a barrel.

BoC Governor Macklem said “further rate hikes may be needed,” but stressed that future decisions would be taken “meeting by meeting” amid elevated uncertainty during his parliamentary appearance. He noted that higher Oil prices and refinery margins are raising costs for consumers and businesses, with more of those costs expected to feed into inflation over the coming year.

Macklem said CPI inflation is expected to rise to “3.5% by year-end,” remain “at or above 3% through much of 2027,” and return close to the BoC’s 2% target by mid-2028.

Across the border, the US Dollar holds its ground amid uncertainty surrounding US-Iran negotiations and a hawkish Fed outlook. Stronger-than-expected US jobs data offered support to the Greenback, although traders remain reluctant to take aggressive positions amid the US midterm elections.

JOLTS Job Openings rose to 7.523 million in September from 7.19 million, exceeding forecasts of 7.13 million. The US Dollar Index (DXY), which tracks the currency against six major peers, trades flat around 101.80, recovering from an intraday low of 101.63.

Attention now turns to Friday’s employment reports from both countries. Canada’s Labour Force Survey and US Nonfarm Payrolls (NFP) could shape expectations for the BoC and Fed’s next moves as traders assess the prospect of further rate hikes in December.

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		-0.02%	-0.07%	0.38%	0.00%	0.36%	0.02%	0.30%
EUR	0.02%		-0.04%	0.37%	0.02%	0.38%	0.04%	0.31%
GBP	0.07%	0.04%		0.43%	0.07%	0.42%	0.08%	0.36%
JPY	-0.38%	-0.37%	-0.43%		-0.36%	-0.01%	-0.34%	-0.06%
CAD	0.00%	-0.02%	-0.07%	0.36%		0.36%	0.02%	0.30%
AUD	-0.36%	-0.38%	-0.42%	0.01%	-0.36%		-0.32%	-0.06%
NZD	-0.02%	-0.04%	-0.08%	0.34%	-0.02%	0.32%		0.28%
CHF	-0.30%	-0.31%	-0.36%	0.06%	-0.30%	0.06%	-0.28%

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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