USD/CAD depreciates after holding ground in the previous session, trading around 1.3660 during the Asian hours on Friday. The pair loses ground as the Canadian Dollar (CAD) receives support from improved Oil prices, given Canada’s status as the largest crude exporter to the United States (US).
West Texas Intermediate (WTI) Oil price trades around $65.60 per barrel during the early European hours on Friday after recovering from daily losses. Crude Oil prices fluctuated amid heightened tensions surrounding nuclear talks between the United States and Iran.
Crude prices may further decline as Washington and Tehran agreed to continue talks next week, easing immediate supply concerns. Iranian Foreign Minister Abbas Araqchi described Thursday’s discussions as the most substantive yet, noting that Iran clearly outlined its demands for sanctions relief and the framework for lifting restrictions.
However, geopolitical tensions remain persistent after Iran said it would not allow enriched uranium to leave the country. A sizeable US military presence in the Middle East has kept markets cautious, with President Donald Trump warning of possible military action if no agreement is reached.
The USD/CAD pair weakens as the US Dollar (USD) loses ground due to uncertainty over US trade policy. US President Donald Trump announced plans to impose a blanket 15% tariff on imports after a Supreme Court ruling struck down his earlier reciprocal tariff regime. Meanwhile, US Trade Representative Jamieson Greer said tariffs could be raised to 15% or higher for several countries in the coming days.
Traders now look to the US Producer Price Index (PPI) data for January release for guidance on Federal Reserve (Fed) policy later in the day. The report is forecast to show wholesale inflation slowing to 0.3% month-on-month, down from 0.5% in December.
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