USD/CAD flat after Trump delays Iran strikes, easing Dollar demand
- USD/CAD trades flat on Monday, even as the US Dollar softens following Trump’s decision to postpone planned strikes on Iran.
- Elevated Crude Oil prices continue to provide underlying support to the Canadian Dollar.
- Ongoing uncertainty around the Middle East conflict keeps volatility elevated across global markets.
The Canadian Dollar (CAD) struggles for direction against the US Dollar (USD) on Monday, even as the Greenback weakens following US President Donald Trump’s decision to postpone planned strikes on Iranian energy infrastructure
At the time of writing, USD/CAD trades near 1.3715 after briefly hitting an intraday low of 1.3683 in the immediate reaction to Trump’s comments.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 99.37 after pulling back from an intraday high of 100.15.
Trump said he had instructed the Department of War to postpone planned strikes on Iranian power plants and energy infrastructure for five days, subject to the outcome of ongoing discussions, Reuters reported. Crude Oil prices fell sharply on the news, with West Texas Intermediate (WTI) falling nearly 12% in the immediate reaction before trimming losses to around 7.5%. At the time of writing, WTI is trading near $90, after touching an intraday low of $83.99.
While the move has temporarily eased further escalation risks, uncertainty around the conflict remains high. Iran’s Fars News Agency, citing sources, said there are no direct communications with the US, nor through intermediaries. At the same time, Iran’s Foreign Ministry, cited by Mehr News Agency, said Trump’s remarks are aimed at lowering energy prices and buying time for military plans.
Despite the intraday decline, Oil prices remain relatively high, helping limit downside pressure on the commodity-linked Loonie, as Canada is a major crude exporter.