- Oil continues scaling higher amid intensifying geopolitical tensions and underpins Loonie.
- The USD remains on the defensive amid Fed rate cut bets and does little to lend any support.
The USD/CAD pair met with some fresh supply at the start of a new trading week and slipped below the 1.3200 handle, erasing Friday's modest recovery gains.
Geopolitical tensions in the Middle East escalated further after Iran shot down a US drone over the Strait of Hormuz last week and the US Secretary of State Mike Pompeo said that significant sanctions on Iran would be announced on Monday.
The latest developments helped Oil prices to extend gains from last week, which turned out to be one of the key factors underpinning demand for the commodity-linked currency - Loonie and exerting some fresh downward pressure on the major.
On the other hand, the US Dollar remained on the defensive in the wake of the latest dovish shift by the FOMC, wherein the central bank indicated that it stands ready to cut interest rates to support economic growth and combat subdued inflation pressure.
The combination of negative forces failed to assist the pair to build on Friday's goodish intraday recovery, rather dragged it back within the striking distance of multi-month lows set last week, though the downside seemed limited, at least for the time being.
There isn't any major market-moving economic data due for release either from the US or Canada and hence, the USD/Oil price dynamics might continue to act as key determinants of the pair's momentum through Monday's trading session.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
AUD/USD consolidates gains above 0.6500 after Australian PPI data
AUD/USD is consolidating gains above 0.6500 in Asian trading on Friday. The pair capitalizes on an annual increase in Australian PPI data. Meanwhile, a softer US Dollar and improving market mood also underpin the Aussie ahead of the US PCE inflation data.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Stripe looks to bring back crypto payments as stablecoin market cap hits all-time high
Stripe announced on Thursday that it would add support for USDC stablecoin, as the stablecoin market exploded in March, according to reports by Cryptocompare.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.