Home Forex USD/CAD snaps two-day losing streak on lower oil prices, improves to near 1.3430

USD/CAD snaps two-day losing streak on lower oil prices, improves to near 1.3430

by SuperiorInvest


  • USD/CAD strengthened due to the escalation of the situation in the Middle East.
  • The Canadian dollar faces challenges due to lower oil prices.
  • The US Fed is expected to introduce more significant interest rate cuts in 2024 compared to other central banks.

USD/CAD is struggling to snap a two-day losing streak as it opened the week higher near 1.3430 during Asian hours on Monday. Lower Oil prices they put pressure on the Canadian dollar (CAD), which in turn supports it USD/CAD pair. In addition, the US dollar could potentially find support from its safe haven status, particularly on concerns about maritime trade in the Red Sea. Both the US and UK want to escalate their campaign without igniting a wider conflict with Iran, which would see more ships diverted from the Suez Canal and the Red Sea.

West Texas Intermediate (WTI) prices continue to follow a downward trajectory, trading near $73.30 per barrel at press time. Oil prices are under downward pressure due to various factors. One significant factor is the slow economic recovery in China, which casts doubt on oil demand in the world’s largest oil importer. In addition, extremely cold weather in the United States (US) has limited travel across large regions, raising concerns about a possible slowdown in oil demand.

The American dollar The index (DXY) has moved in two consecutive sessions, influenced by market expectations that the US Federal Reserve (Fed) could introduce a more significant cut in key interest rates in 2024 compared to other major central banks around the world.

Traders will be watching economic indicators such as US Richmond Fed Manufacturing index and Canadian housing data will be released on Tuesday. These data points could provide further impetus for the economic scenarios in both countries.

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