Dollar Weakness and Oil Prices Keep USD/CAD Rangebound

The US dollar weakened against the Canadian dollar on Monday's Asian trading session, with USD/CAD hovering around 1.4090 and ending a modest uptrend.

The dollar's decline was driven by improved market risk sentiment following the suspension of further military action between the United States and Iran, which reduced demand for safe-haven inflows into the greenback.

However, concerns over energy supply risks have not dissipated, with recent attention turned to shipping security in the Red Sea after Yemen's Houthi militants claimed attacks on Saudi energy infrastructure along the coast.

Falling crude oil prices also limited the Canadian dollar's upside potential, as its value is closely tied to international oil prices. WTI crude opened sharply lower on Monday, gapping down by more than 5% to around $84.50 per barrel.