Canadian Dollar Stuck in Neutral Amid Oil Price Plunge
The Canadian dollar has been directionless in recent trading, weighed down by significant interest rate differentials and declining oil prices. The WTI price plummeted to $92.71 after reports emerged that US President Trump is willing to meet with Iranian President Masoud Pezeshkian at the UN General Assembly.
This sharp turnaround came after markets had priced in a risk of further US military action against Iran, pushing oil prices up to $103.50 on Friday. However, Trump's willingness to sit down with the Iranian leader has led investors to reassess their positions and oil prices have subsequently dropped.
The Bank of Canada Governor Tiff Macklem is due to address 'economic developments' in Halifax today, but the Canadian dollar's lack of direction may be a concern for investors looking for guidance on future monetary policy decisions. The US dollar has found support from Fed officials Neal Kashkari and Jeffrey Schmid, who have defended last week's rate increase citing persistent inflation risks.