USD/CAD maintains losses near 1.3800, six-month lows due to higher Oil prices

• USD/CAD slips as the Canadian Dollar finds support from a rebound in crude Oil prices and favorable macroeconomic factors.

• China’s 90% reduction in US Oil imports has redirected more than a quarter of its seaborne demand toward Canadian shipments.

• The US Dollar stays on the back foot, pressured by rising political and economic uncertainty in the United States.

USD/CAD continues to slide for the second consecutive day, trading near 1.3810 during Tuesday’s European session. The Canadian Dollar (CAD) gains traction, buoyed by a rebound in crude Oil prices and broader macroeconomic factors.

West Texas Intermediate (WTI) Oil price has bounced back from Monday’s sell-off, trading around $63.30 per barrel as investors covered short positions. Adding to the upside, China’s 90% cut in US Oil imports has shifted over a quarter of its seaborne demand to Canadian supply via the new Alberta–Vancouver pipeline, boosting export revenues and bolstering the CAD.

Meanwhile, markets continue to digest the Bank of Canada's (BoC) recent decision to hold its policy rate at 2.75%. The central bank cited an uncertain US tariff outlook, highlighting that stable growth with near-target inflation remains possible, but escalating tariffs could trigger recessionary pressures and rising inflation in Canada.

Political developments are also in focus as Canada enters the final stretch of its federal election campaign. Prime Minister Mark Carney’s promises of tax cuts and increased infrastructure and defense spending have introduced additional fiscal uncertainty.

The US Dollar (USD) remains under pressure, weighed down by heightened political and economic uncertainty in the United States. Investor sentiment is fragile amid a prolonged global trade impasse, especially as China pushes back against President Trump’s tariff strategies. Concerns escalated further following Trump’s proposal to investigate critical mineral imports, raising fears of slower US growth and inflationary risks.