USD/CAD Hangs in Balance as Oil Prices and Interest Rates Weigh In
The USD/CAD exchange rate has been oscillating around the 1.4000 level due to falling oil prices and a widening interest rate differential between the United States and Canada.
The decline in oil prices is one of the key factors affecting the Canadian dollar, with U.S. WTI crude plummeting to near $93.60 per barrel on Monday, marking its fourth consecutive daily decline.
The Bank of Canada maintained its policy rate at 2.25% this month, while the Federal Reserve raised rates by 25 basis points last week to a range of 3.75%, 4.00%, further broadening the spread between the U.S. dollar and the Canadian dollar.
The impact of the U.S. interest rate advantage on USD/CAD has become increasingly evident, with the Canadian dollar previously falling to around 1.4001 per U.S. dollar, its lowest level since August 7.