Oil Price Surge Lifts Canadian Dollar Despite Fed Rate Hike Bets
The Canadian Dollar (CAD) has found support from a surge in Oil prices, despite bets of a Federal Reserve rate hike. The USD/CAD pair traded around 1.3810 on Monday, down 0.15% on the day.
The sharp rise in Oil prices, with West Texas Intermediate (WTI) US Oil climbing above $90 to trade at $90.50, supports the Canadian Dollar as Canada is a major Oil producer and exporter. Higher Oil prices tend to improve the country's export outlook and strengthen demand for the Canadian currency.
The US Dollar retains several sources of support, including expectations that the Federal Reserve could raise interest rates due to strong Nonfarm Payrolls (NFP) report and geopolitical tensions in the Middle East. The Producer Price Index (PPI) and Consumer Price Index (CPI), due on Thursday and Friday, will provide fresh clues about the Fed's monetary policy path.