Canadian Dollar Slumps Amid Fed Hike Bets and Geopolitical Risks
The Canadian Dollar has fallen to its lowest level since July 9 as the US Dollar continues its upward trajectory. The USD/CAD pair is approaching the 1.4200 mark, fueled by a combination of factors that support the Greenback.
One key factor is the Federal Reserve's hawkish outlook, which has pushed US bond yields to multi-year highs and underpins the buck. Additionally, persistent geopolitical uncertainties stemming from the US-Iran standoff benefit the safe-haven USD and act as a tailwind for the USD/CAD pair.
Hopes for Iran diplomacy have capped crude oil prices, undermining the Loonie amid the Bank of Canada's dovish policy outlook. This has contributed to the Canadian Dollar's decline, with spot prices holding firmly above the 100-day Simple Moving Average (SMA) at 1.3977.