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- USD/CAD rises as the US Dollar strengthens after Trump’s remarks lacked clear Middle East de-escalation.
- Trump reiterated that Iran’s military capabilities were significantly weakened, signaling an end to the conflict.
- The Canadian Dollar may gain support as oil prices rise following Trump’s comments, boosting energy market sentiment.
USD/CAD rebounds after two days of losses, trading around 1.3900 during the Asian hours on Thursday. The pair appreciates as the US Dollar (USD) strengthens after US President Donald Trump’s latest address showed no clear Middle East de-escalation, keeping geopolitical risk elevated.
US President Donald Trump reiterated that Iran’s military capabilities have been significantly weakened, noting that its missile and drone capacity has been curtailed. Trump added that the US no longer relies on Middle Eastern oil. He emphasized that Iran’s naval and air forces have been severely diminished, with leadership losses further reducing its operational strength, while signaling that the US intends to conclude the conflict swiftly within 2-3 weeks.
The Greenback struggled as markets reassessed the US Federal Reserve’s (Fed) policy outlook amid shifting geopolitical risks, growth concerns, and persistent inflation pressures. The Fed kept interest rates unchanged at 3.50%–3.75% following its March 17–18, 2026 meeting. Nevertheless, the median dot plot still points to one 25-basis-point rate cut later in 2026, although some policymakers now anticipate no cuts this year.
Meanwhile, US Treasury yields are recovering, with both 2-year and 10-year notes extending gains after strong economic data reinforced expectations that rates could remain steady for longer. St. Louis Fed President Alberto Musalem noted that current monetary policy is appropriately positioned and likely to remain unchanged for some time.
However, the upside of the USD/CAD pair could be restrained as the Canadian Dollar (CAD) could receive support from higher oil prices, given the fact that Canada is the largest crude exporter to the United States (US).
West Texas Intermediate (WTI) oil price gains nearly 5% after two days of losses, trading around $98.90 per barrel at the time of writing. Crude oil prices rise as Trump’s latest remarks lack fresh signals on Iran, prompting cautious sentiment across energy markets.
