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USD/CAD holds in tight range as US-Iran deal hopes hit USD, sap Canadian Dollar support

  • USD/CAD trades sideways around 1.3630 on Thursday, virtually unchanged on the day.
  • Hopes for a US-Iran agreement push Oil prices lower and weaken the Canadian Dollar.
  • Investors now await US labor market data and weekly Initial Jobless Claims.

USD/CAD trades around 1.3630 on Thursday at the time of writing, showing little change on the day, as lower Oil prices continue to weigh on the Canadian Dollar (CAD) while the US Dollar (USD) remains pressured as well.

Market sentiment improves after US President Donald Trump said he had “very good talks” with Iran, adding that a deal remained “very possible”. Meanwhile, Iranian Foreign Ministry spokesman Esmaeil Baghaei stated that a US proposal aimed at ending the conflict was still “under review”.

According to several reports released on Thursday, Tehran is reviewing a 14-point peace plan proposed by Washington, while intense discussions are also reportedly underway regarding the reopening of the Strait of Hormuz. This backdrop supports risk appetite and pressures Crude Oil prices lower, a negative factor for the commodity-linked Canadian Dollar.

West Texas Intermediate (WTI) crude remains under pressure above $90 per barrel, while Brent trades below $100, limiting support for the Loonie.

On the US side, investors are now focused on upcoming labor market data. The weekly Initial Jobless Claims report is due later on Thursday, ahead of Friday’s Nonfarm Payrolls (NFP) report. Economists expect 60,000 job additions in April, while the Unemployment Rate is projected to remain steady at 4.3%.

Meanwhile, Boston Federal Reserve Bank President Susan Collins said on Thursday that the Federal Reserve (Fed) could keep interest rates unchanged “for a longer period”, while still viewing rate cuts as the baseline scenario “down the road”. Collins also noted that an alternative scenario could lead the central bank to consider a rate hike.

Despite these cautious remarks, the US Dollar (USD) remains broadly capped, with the US Dollar Index (DXY) edging lower around 97.90 amid an improved risk environment.

Scotiabank analysts believe the short-term technical trend remains negative for the Greenback against the Canadian Dollar. The bank noted that USD/CAD would need to regain the 1.3720 area on a sustained basis to signal meaningful bullish strength, while US Dollar rebounds continue to be viewed as selling opportunities.

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-0.15%-0.15%0.02%-0.04%-0.27%-0.41%-0.08%
EUR0.15%-0.01%0.17%0.12%-0.13%-0.27%0.07%
GBP0.15%0.00%0.15%0.11%-0.13%-0.26%0.06%
JPY-0.02%-0.17%-0.15%-0.08%-0.30%-0.48%-0.10%
CAD0.04%-0.12%-0.11%0.08%-0.23%-0.37%-0.05%
AUD0.27%0.13%0.13%0.30%0.23%-0.14%0.20%
NZD0.41%0.27%0.26%0.48%0.37%0.14%0.32%
CHF0.08%-0.07%-0.06%0.10%0.05%-0.20%-0.32%

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

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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