Canadian Dollar Hits July Low as Strong USD Continues to Rise

The Canadian Dollar has fallen to its lowest level since July 9 against the US Dollar (USD), trading at around 1.4200 due to a strong and bullish USD. The upward trajectory of the USD/CAD pair, which began three weeks ago, continues to strengthen as the USD Index (DXY) holds near a two-month high.

This surge in the USD can be attributed to the Federal Reserve's hawkish outlook, with another rate increase projected by the end of this year. The Fed has already raised interest rates for the first time in over three years, adding to energy-driven inflation fears and pushing US bond yields to multi-year highs.

Persistent geopolitical uncertainties, including the ongoing US-Iran standoff, have also contributed to the safe-haven USD's strength. US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, capping the upside for crude oil prices.