- USD/CAD edges higher to near 1.3750 in Tuesday’s Asian session.
- Iran’s Foreign Minister said there was “no dialogue” between Tehran and Washington.
- Higher crude oil prices could support the commodity-linked Loonie.
The USD/CAD pair gathers strength to around 1.3750 during the Asian trading hours on Tuesday. Uncertainty and the ongoing US-Israel war on Iran continue to boost the US Dollar (USD) against the Canadian Dollar (CAD). The preliminary reading of the US S&P Global Purchasing Managers Index (PMI) for March will be released later on Tuesday.
US President Trump late Monday announced a five-day postponement of planned military strikes on Iranian energy infrastructure. Trump added that there are 15 points of agreement between the US and Iran after talks this weekend, per CNN. Nonetheless, Iranian officials denied any talks with the US following Trump’s remarks.
Mohsen Rezaei, the senior military adviser to Iranian Supreme Leader Mojtaba Khamenei, said that the war will continue until Iran receives full compensation for the damage it has sustained. Signs of a prolonged conflict in the Middle East could underpin safe-haven currencies such as the Greenback in the near term.
Meanwhile, crude oil prices soared as traders reacted to Iran’s denial of peace talks with the US. It is worth noting that Canada is a major oil-exporting country, and higher crude oil prices generally have a positive impact on the CAD.
The US Federal Reserve (Fed) held interest rates steady at 3.50%–3.75% last week and expressed concern about the impact of rising oil prices on inflation. The BoC left its key overnight rate unchanged at 2.25% at its March meeting but warned that the outlook is highly uncertain and that the Iran conflict has heightened the risks to the global economy.
