Dollar Rises Against Loonie on Falling Oil Prices
The US Dollar has gained traction for the fourth consecutive day against the Canadian Dollar, pushing the USD/CAD pair towards weekly highs at 1.4080.
This appreciation is largely due to the decline in Oil prices, which has offset the impact of Canada's strong Merchandise Trade Surplus. The price of Brent Oil has fallen to three-week lows below $80, amid hopes that diplomacy will resolve the US-Iran conflict.
The decline in Oil prices has weighed on the Canadian Dollar, as it is Canada's main export. Additionally, soft US data and fading hopes of immediate Federal Reserve rate hikes have also contributed to the USD's appreciation.
Technical analysis suggests that the USD/CAD pair may continue to rise, with a potential target at 1.4125, ahead of the year-to-date highs in the area of 1.4250. However, if the price falls below 1.4000, it could challenge bears.