CAD Surges as Oil Prices Soar Amid Iran-US Tensions
The Canadian dollar (CAD) outperformed the US dollar (USD) on Monday, as geopolitical tensions in the Middle East drove up oil prices and boosted the CAD. The USD/CAD pair fell 0.24% to trade around 1.3870 at the time of writing.
The escalation of tensions between the United States and Iran has fueled concerns over energy supplies, supporting oil prices and benefiting the Canadian dollar as Canada is a major oil producer and exporter. US forces struck two rocket launchers on Iran's Larak Island in the Strait of Hormuz on Sunday, prompting Tehran to retaliate with ballistic missiles targeting two US bases in Jordan.
US Treasury Secretary Scott Bessent said that new secondary sanctions could be announced on a weekly basis to increase pressure on Iran. This move has added to the uncertainty and driven up oil prices, which is expected to continue supporting the Canadian dollar in the short term.