The US Dollar approaches year-to-date lows at 1.3565 as demand for safe havens wanes.
Higher Oil prices are acting as support for the Canadian Dollar..
Markets are positive that the Trump-Carney meeting might bring some advances on a tariff deal.
The USD/CAD recovery attempt seen during Monday’s early trade has failed to find acceptance above 1.3600. The pair retraced gains afterwards, weighed by broad-based US Dollar weakness, and is approaching eight-month lows at 1.3565.
The Greenback opened the week on a moderate positive tone, and trimmed some losses, favoured by a significant reversal on Oil prices. The US Benchmark WTI corrected 3% lower on early trading, retreating from $75.00 to levels right above $71, and dragging the commodity-sensitive CAD down with them.
The US Dollar loses ground as safe-haven demand fades
The pair, however, was unable to extend gains past the 1.3600 level, with fears about the Iran and Israel conflict easing, which has undermined demand for safe-haven assets. Several countries have offered themselves to mediate in the war, and US President Trump is pushing the rivals to find a deal, which has contributed to easing market concerns.
On the other hand, a news report released over the weekend revealed that last week’s agreement between the US and China might have left the key issue of rare earths trade unresolved. This has revived concerns about tariff uncertainty, as the clock ticks towards the July 9 deadline with no significant progress on trade deals.
In Canada, a moderate optimism that the scheduled meeting between US President Trump and Canadian Prime Minister Mark Carney ahead of the G7 summit might help to bring the parties close to some trade compromise is acting as support for the loonie.
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