The USD/CAD pair loses ground to near 1.4165 during the Asian trading hours on Thursday. A rise in crude oil prices provides some support to the commodity-linked Canadian Dollar (CAD) against the US Dollar (USD). Traders await the US weekly Initial Jobless Claims report later on Thursday.
Axios reported that the US strikes hit a rail line in Golestan province in northeastern Iran, near the border, using cruise missiles. It marked the first US strike on Iranian infrastructure since the ceasefire took hold. Iran said multiple US artillery shells struck a railway bridge west of Aghala in Golestan early Thursday, triggering several explosions.
Earlier, US President Donald Trump said an interim agreement to end the war with Iran was “over.” Iranian Parliament speaker Mohammad Bagher Ghalibaf warned Washington that any U.S. military action will prompt retaliation. It is worth noting that Canada is a major oil-exporting country, and high crude oil prices generally have a positive impact on the Loonie.
"The CAD has performed relatively well through the overnight volatility," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note. "Negative CAD sentiment is moderating but spot remains quite elevated."
The Bank of Canada (BoC) decided to hold its benchmark overnight interest rate at 2.25% at its June policy meeting, marking its fifth consecutive rate hold. Traders see a roughly 60% odds the BoC will raise interest rates this year, up from 40% on Tuesday, swap market data showed.
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