Oil Price Slump Weighs on Canadian Dollar Amid Renewed US-Iran Diplomacy

The Canadian Dollar (CAD) is weakening against the US Dollar (USD) due to a decline in oil prices. Oil prices fell after US President Donald Trump announced that planned military strikes against Iran were cancelled, and new negotiations with Tehran are expected to begin on Monday. Although Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated that no talks are currently taking place with Washington, the prospect of renewed diplomacy has eased supply concerns and pushed crude prices sharply lower.

Canada is a major oil exporter, meaning weaker oil prices generally weigh on the Loonie. USD/CAD trades around 1.4040 on Monday at the time of writing, up 0.14% on the day as the CAD comes under pressure from the decline in oil prices. Investors are now shifting their focus to key US economic releases this week.

The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) is due later on Monday, followed by the Job Openings and Labor Turnover Survey (JOLTS) report, the ADP Employment Change report, and Friday's Nonfarm Payrolls (NFP). Canada will also publish its employment report on Friday.