USD/CAD Rises on Safe-Haven Demand and Geopolitical Tensions

The USD/CAD exchange rate has continued its upward trend for a second consecutive day, reaching around 1.4020 during Asian hours on Friday.

This increase is largely due to safe-haven demand supporting the US Dollar (USD), despite stronger oil prices that would typically benefit the Canadian Dollar (CAD).

Geopolitical tensions in the Strait of Hormuz have raised concerns over the flow of energy exports, driving crude prices higher and intensifying the risk premium across global assets.

The Federal Reserve's hawkish rhetoric has also contributed to the USD/CAD climb, with markets assigning a 54.5% probability to a 25-basis-point rate hike in September.