Canadian Dollar Weighed Down by Oil Prices, Interest Rate Spreads

The Canadian dollar is feeling the pressure from lower oil prices and widening interest rate spreads between the US and Canada, causing it to drift in a tight overnight range. However, risk sentiment has improved globally after Wall Street surged on strong technology earnings and renewed optimism over a potential US-Iran ceasefire agreement.

Axios reported that Washington is seeking a 60-day temporary arrangement for routing inbound Gulf traffic through Iranian waters and outbound traffic through Omani waters. This news helped WTI retreat into a 74.23-76.40 range, with the current price at $76.54.

Canada-US trade talks are also gaining momentum, with Ottawa potentially willing to cap metal exports in exchange for reducing the current 50% tariff. Washington is pushing for greater access to Canada's dairy market and removal of provincial restrictions on alcohol imports in eight provinces.