The Canadian dollar is on its back foot today, with the USD/CAD pair climbing to around 1.3750—a level we haven’t seen in nearly three weeks.
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It was a bit of a tug-of-war for the Canadian dollar on Tuesday. After briefly flexing some strength against the US dollar, the Canadian dollar gave back its gains, settling right where it started. Flat might not sound dramatic—but behind the scenes, there’s a storm of global uncertainty keeping traders on edge.
Global Tensions Are Lifting the U.S. Dollar
Over the weekend, the U.S. deepened its involvement in the Israel-Iran conflict, launching airstrikes on nuclear sites in Iran. That move turned up the geopolitical heat and sent markets into risk-off mode. One of the big concerns? Iran’s parliament is backing the idea of blocking the Strait of Hormuz—a vital artery for the world’s oil supply.
In response, investors have started to move toward safety, and the U.S. dollar has been the main beneficiary. It’s now trading at its highest level in a month, with USD/CAD climbing to around 1.38 and holding its gains for five straight sessions
The Canadian dollar is catching its breath this week after a sharp multi-month climb. After gaining nearly 10 cents since early February, the USD/CAD pair is now drifting around the 1.3575 mark—stuck in limbo as traders await the next big move from the U.S. Federal Reserve and keep one eye on rising tensions in the Middle East.