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Forex

Loonie Slumps as Oil Prices Plunge Amid Hopes for US-Iran Deal

Guavy AI Editorial Team
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USD CAD
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The USD/CAD pair is trading near its one-week high due to weak oil prices and receding geopolitical tensions. The Canadian dollar, or Loonie, has been undermined by sliding crude oil prices, which are now at a nearly four-week low.

Renewed hopes of a US-Iran deal to reopen the Strait of Hormuz have contributed to the decline in oil prices. This has tempered inflation fears and reduced expectations for a Federal Reserve rate hike in the US.

Despite this, traders are still pricing in a greater chance of a rate hike by the end of 2023. The Kansas City Fed President Jeff Schmid and Philadelphia Fed President Anna Paulson have backed the case for higher interest rates to fight inflation.

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