- USD/CAD trims its intraday losses as the Canadian Dollar weakens amid falling crude Oil prices.
- WTI continued its downward trend, sliding nearly 3% on Thursday after a more than 1% drop in the previous session.
- Speculation is building that the US may prefer a weaker dollar to boost trade competitiveness.
USD/CAD stabilized around 1.3980 during Thursday’s European trading hours, recovering earlier losses as the Canadian Dollar (CAD) came under pressure due to declining crude Oil prices. Given Canada’s status as the largest Oil exporter to the United States (US), falling Oil prices often dampen CAD sentiment.
West Texas Intermediate (WTI) Oil price extended its recent decline, dropping around 3% on Thursday after losing over 1% in the prior session. At the time of writing, WTI hovers near $60.60 per barrel, with prices pressured by mounting concerns over a potential global supply glut.
Market sentiment was further influenced by comments from US President Donald Trump, who stated, “I think we are getting very close to getting a deal with Iran. Iran has agreed to the terms; we want them to succeed. We were losing the Middle East due to the past administration.”
Despite CAD weakness, the USD/CAD pair faces some resistance as the US Dollar (USD) remains weighed down by persistent trade uncertainties, even as tensions show signs of easing. Traders are now looking ahead to key US economic releases, including Retail Sales and Producer Price Index (PPI) data due later in the day.
There is also growing speculation that the US may favor a weaker dollar to enhance its trade competitiveness. The Trump administration has argued that a strong Greenback puts American exporters at a disadvantage against countries with weaker currencies.
Still, any downside in the USD could be limited. Improving global trade sentiment has reduced recession fears, leading markets to scale back expectations for aggressive Federal Reserve rate cuts. According to LSEG data, the likelihood of a 25-basis-point cut in September now stands at 74%, down from earlier predictions for a cut in July.
