Oil Price Slump Weighs on Loonie as USD/CAD Pair Edges Higher
The USD/CAD pair began the week on a positive note, but its gains are limited due to mixed fundamental cues. The US Dollar is up slightly, but the Canadian Dollar is under pressure from falling oil prices. Crude oil prices dropped after US President Donald Trump cancelled a threatened attack on Iran, and OPEC+ members agreed to increase oil production by 188,000 barrels per day in September.
This development undermines the commodity-linked Loonie and supports the USD/CAD pair. However, the prevalent US Dollar selling bias caps further gains for the pair. The intraday slump in crude oil prices has eased inflation fears and tempered bets for an immediate interest rate hike by the US Federal Reserve.
Market participants are now looking forward to this week's important US macroeconomic releases, including the ISM Manufacturing PMI later today and the crucial monthly employment reports from the US and Canada on Friday. These releases will play a key role in influencing the USD/CAD pair in the near term.