USD/CAD steadies as Middle East war support Dollar, Canada CPI data looms

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USD/CAD trades around 1.3690 on Monday at the time of writing, virtually unchanged on the day, after rebounding from the monthly low near 1.3650 reached on Friday.

USD/CAD hovers near 1.3700 after rebounding from the monthly low around 1.3650 reached on Friday.
Geopolitical tensions between Washington and Tehran support safe-haven demand for the US Dollar.
Investors await Canada’s March inflation data, which could influence monetary policy expectations.

USD/CAD trades around 1.3690 on Monday at the time of writing, virtually unchanged on the day, after rebounding from the monthly low near 1.3650 reached on Friday. The recovery remains limited as investors balance demand for the US Dollar (USD) with support for the Canadian Dollar (CAD) from rising Oil prices.

The US Dollar is benefiting from increased safe-haven demand amid renewed geopolitical tensions in the Middle East. Iran indicated that no new round of negotiations with the United States (US) is planned, accusing Washington of maintaining excessive pressure and violating the ceasefire through the continuation of its maritime blockade. These developments have revived risk aversion and supported the Greenback.

In this context, the US Dollar Index (DXY), which measures the value of the US Dollar against a basket of six major currencies, edges higher around 98.30. Meanwhile, several Federal Reserve (Fed) officials have warned about the economic risks associated with a prolonged war in the Middle East, particularly through persistently higher energy prices that could fuel inflation.

However, gains in USD/CAD remain capped by rising Oil prices, a factor that typically supports the Canadian Dollar. West Texas Intermediate (WTI) US Oil is up 4.06% on Monday, trading around $87.30 at the time of press, supported by concerns over energy flows through the Strait of Hormuz following Iranian threats against commercial vessels.

Market attention now turns to the release of Canada’s Consumer Price Index (CPI) for March, which is due later in the day. Economists expect monthly inflation to accelerate to 1.1%, after 0.5% in February, while annual inflation could rise to 2.5%. Higher energy costs largely drive the expected increase.

These figures could complicate the outlook for the Bank of Canada (BoC). If inflation accelerates sharply, markets could revive expectations of monetary tightening, even as Canada’s economic growth remains fragile.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.03%	0.11%	0.21%	-0.01%	0.23%	0.10%	-0.00%
EUR	-0.03%		0.09%	0.13%	-0.06%	0.19%	0.10%	-0.05%
GBP	-0.11%	-0.09%		0.04%	-0.13%	0.10%	-0.01%	-0.15%
JPY	-0.21%	-0.13%	-0.04%		-0.17%	0.05%	-0.10%	-0.19%
CAD	0.01%	0.06%	0.13%	0.17%		0.23%	0.08%	-0.02%
AUD	-0.23%	-0.19%	-0.10%	-0.05%	-0.23%		-0.13%	-0.24%
NZD	-0.10%	-0.10%	0.00%	0.10%	-0.08%	0.13%		-0.11%
CHF	0.00%	0.05%	0.15%	0.19%	0.02%	0.24%	0.11%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).