USD/CAD Surges Above 1.4000 Amid Fed Hopes and Middle East Tensions
The US dollar gained ground against its Canadian counterpart on Friday as investors weighed the prospects of an interest rate hike by the Federal Reserve. The USD/CAD pair rose above the psychological mark of 1.4000, snapping a three-day losing streak to its lowest level since June 17.
The US economy's moderating growth in the second quarter and signs of cooling inflation tempered hawkish Fed expectations, but volatile crude oil prices kept a lid on the dollar's gains. Escalating tensions between the US and Iran added to concerns about global energy supplies, potentially supporting crude oil prices and the commodity-linked Canadian dollar.
The Bank of Canada's interest rate decisions also weighed heavily on the CAD, with higher rates typically being positive for the currency. However, investors remained cautious due to rising oil prices and geopolitical tensions.