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- USD/CAD declines to around 1.4005 in Monday’s Asian session.
- Iran said it targeted US aircraft in Jordan.
- Cooling in June’s US inflation data slashed the immediate odds of a Fed July rate hike.
The USD/CAD pair extends its downside to near 1.4005 during the Asian trading hours on Monday. Rising crude oil prices provide some support to the commodity-linked Canadian Dollar (CAD) against the US Dollar (USD). Traders brace for the release of Canada’s Consumer Price Index (CPI) inflation data later on Monday.
The Guardian reported on Monday that US President Donald Trump said that the latest US strikes on Iran were being carried out in honor of US service members killed in recent days. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) said that the Strait of Hormuz will not be safe for petrochemical products or ‘single drop of oil and gas’ transit as long as US actions in the region continue. The Iranian military added that it targeted US aircraft at Jordan’s Aqaba airport with ballistic missiles.
Air raid sirens sounded across Bahrain after Iran carried out a fresh wave of ballistic missiles and one-way attack drones targeting sites in Bahrain, Jordan, Kuwait and Iraq. It is worth noting that Canada is a major oil-exporting country, and high crude oil prices generally have a positive impact on the Loonie.
Traders reduce their bets on the US interest rate hike in July after signs of softer inflation in the US, which could weigh on the Greenback. The odds for a Federal Reserve (Fed) rate hike in July stood at 14%, versus a 25% implied chance last week, according to the CME FedWatch tool. However, Fed Governor Christopher Waller warned that policymakers need to see “several months” of sustained cooling before taking rate hikes off the table.
