USD/CAD Rebound Limited by Ongoing US-Iran Conflict

The USD/CAD currency pair rebounded on Tuesday after falling to an intraday low of 1.3760, trading near 1.3790 at the time of writing.

Despite this recovery, the pair remained around 0.18% lower on the day, reflecting continued strength in the Canadian Dollar (CAD).

The Loonie has benefited from elevated Oil prices due to Canada's position as a major crude exporter, but its gains are constrained by renewed risk aversion.

Geopolitical tensions in the Middle East have intensified, with Iranian officials warning of further attacks that could prompt Tehran to target energy infrastructure across the Gulf, including US Oil and Gas interests.

The ongoing US-Iran conflict has extended for six months and continues to underpin Oil prices, which generally benefit the Canadian Dollar because energy exports play a significant role in Canada's economy.