The USD/CAD pair has extended its gains, approaching the 1.3900 mark as a drop in oil prices strengthens the U.S. dollar against the Canadian dollar. Oil, a key export for Canada, heavily influences the Canadian currency, and recent price declines have put downward pressure on the CAD. With oil prices retreating amid concerns about global demand and rising inventories, the Canadian dollar has lost ground, allowing USD/CAD to edge higher.
The U.S. dollar, bolstered by relatively strong economic indicators and hawkish Fed expectations, has capitalized on this weakness in oil. As markets factor in continued demand for the safe-haven dollar and a potentially slower global economy impacting oil demand, USD/CAD remains positioned for further gains. Analysts suggest that the pair’s trajectory will largely depend on oil price movements and upcoming economic data from both countries. For now, a break above 1.3900 could signal a more sustained upward trend if oil prices continue to falter.
