Canadian Dollar continues to gain against the USD while investors anticipate discussions on the US-Iran nuclear deal
USD/CAD Slides for Second Day, Retreats from Monthly High
The USD/CAD currency pair continues its downward movement for a second straight session on Thursday, pulling back from the monthly high reached earlier this week. At present, spot prices are hovering near 1.3665, marking a decline of about 0.20% for the day. However, further losses appear restrained as markets await the outcome of significant US-Iran nuclear negotiations.
US Dollar Pressured by Trade Policy Uncertainty
The US Dollar (USD) remains under pressure as renewed concerns over President Donald Trump’s trade strategies weigh on sentiment, contributing to the USD/CAD pair’s decline. Trump recently introduced a new trade framework and reaffirmed his commitment to his trade policies after the Supreme Court ruled against his broad tariffs last Friday.
During his State of the Union Address on Wednesday, Trump revealed that the administration has shifted to temporary global tariffs of 10% for 150 days under Section 122, with intentions to increase these duties to 15%. These developments have heightened fears of retaliatory actions and potential disruptions to international supply chains, further undermining the Greenback.
Market Sentiment and Oil Prices Influence USD/CAD
Additionally, a generally optimistic mood in equity markets has diminished the USD’s appeal as a safe-haven asset, adding to the downward pressure on the USD/CAD pair. Meanwhile, crude oil prices are stabilizing near their weekly lows following a significant increase in US stock inventories. Despite this, concerns over possible supply disruptions stemming from US-Iran tensions continue to lend some support to oil prices.
Muted crude oil prices have offered little support to the Canadian Dollar, which is closely tied to commodities. As a result, traders may be hesitant to take strong bearish positions on the USD/CAD pair at this stage. It may be wise to wait for more decisive selling pressure before concluding that the recent rebound from the monthly low has fully lost momentum.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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