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USD/CAD edges lower as shifting US-Iran headlines keep markets cautious

  • USD/CAD softens as the US Dollar weakens, allowing the Canadian Dollar to snap a two-day losing streak.
  • Shifting geopolitical headlines around the US-Iran war keep sentiment fragile, limiting downside in the US Dollar.
  • Focus also on upcoming US inflation data and Canada employment figures later this week.

The Canadian Dollar (CAD) gains traction against the US Dollar (USD) on Monday as traders react to evolving geopolitical developments in the US-Iran war. At the time of writing, USD/CAD is trading around 1.3921, hovering near four-month highs.

Risk appetite improved earlier in the Asian session following reports of a potential 45-day ceasefire between the US and Iran, which is weighing modestly on the Greenback. However, the US Dollar pared some of its losses as conflicting headlines kept uncertainty elevated and limited expectations of a near-term resolution.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 99.98 after rebounding from an intraday low near 99.76.

Iran has called for a permanent end to the war in response to the US proposal, according to IRNA, while also rejecting a ceasefire framework conveyed via Pakistan. Meanwhile, a US official cited by Axios said Iran submitted a 10-point response to the proposal, describing it as “maximalist” and noting that it remains unclear whether it would allow progress toward a diplomatic solution.

This suggests the conflict could escalate further, with a deal appearing unlikely ahead of the deadline set by US President Donald Trump, who has warned of potential strikes on power plants and other civilian infrastructure if the Strait of Hormuz is not reopened by Tuesday, 8:00 p.m. Eastern Time.

Beyond immediate geopolitical risks, the broader economic fallout from the war is also coming into focus. Rising Oil prices are adding to inflation pressure while raising concerns about global economic growth, a combination that is complicating the outlook for both the Federal Reserve (Fed) and the Bank of Canada (BoC).

On the data front, the ISM Services Purchasing Managers Index (PMI) for March came in at 54, down from 56.1 in February and below expectations of 55.

Looking ahead this week, market attention will turn to inflation data in the US, including the Consumer Price Index (CPI) for March and the Personal Consumption Expenditures (PCE) Price Index for February. In Canada, the March employment data will also be in focus.

(This story was corrected on April 6 at 17:15 GMT to say USD/CAD was trading around 1.3921, not 1.1315.)

US Dollar Price Today

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

USDEURGBPJPYCADAUDNZDCHF
USD-0.22%-0.26%0.02%-0.23%-0.31%-0.43%-0.24%
EUR0.22%-0.02%0.22%-0.01%-0.11%-0.23%-0.04%
GBP0.26%0.02%0.23%-0.01%-0.09%-0.25%-0.01%
JPY-0.02%-0.22%-0.23%-0.23%-0.34%-0.47%-0.28%
CAD0.23%0.01%0.01%0.23%-0.08%-0.21%-0.02%
AUD0.31%0.11%0.09%0.34%0.08%-0.14%0.07%
NZD0.43%0.23%0.25%0.47%0.21%0.14%0.22%
CHF0.24%0.04%0.00%0.28%0.02%-0.07%-0.22%

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

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