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Canadian Dollar Holds Near 8-Week High, Buoyed by Surging Oil Prices
The Canadian dollar held steady against the U.S. dollar on Monday, maintaining its position near an eight-week high. The commodity-linked currency's strength was underpinned by a sharp rise in oil prices and the continued positive sentiment from a stronger-than-expected domestic employment report last week.
Oil and Jobs Data Bolster Loonie
The primary driver for the loonie on Monday was a surge in the price of crude oil, one of Canada's most critical exports. Oil prices settled 5.05% higher at $82.13 a barrel, reportedly due to rising tensions between the U.S. and Iran that have dimmed prospects for a deal to reopen the Strait of Hormuz.
This builds on momentum from Friday, when government data showed Canada's economy added more jobs than forecast in July. The positive labor report helped push the currency to 1.3923 per U.S. dollar, its strongest level since June 10.
Market Positioning and Trade Context
AdThe recent strength marks a shift in sentiment. In the weeks leading up to a U.S. announcement on new tariffs, speculators had reportedly built up the largest bearish position against the Canadian dollar among all major currencies.
Separately, Canada and the U.S. are said to be in negotiations over a potential agreement to avert new tariffs, according to people familiar with the matter cited on Friday. The discussions reportedly involve Ottawa addressing a series of U.S. trade demands in exchange for Washington withdrawing the tariff threat.
On Monday, the Canadian dollar was trading largely unchanged at 1.3940 per U.S. dollar, or 71.74 U.S. cents, within a daily range of 1.3927 to 1.3964.
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