CAD Peaks at Highest Level Since March

The Canadian dollar strengthened 0.18% to trade around 1.37, reaching its strongest level since March. This recovery was primarily driven by a broader depreciation of the US dollar, as the DXY fell toward the 98.05 level. Technically, the USDCAD has pulled back from April highs near 1.390 and is now testing key support at 1.374. The loonie's gains are also supported by solid domestic data, including a 3.6% surge in Manufacturing Sales and a 2% rise in Wholesale Sales for February. While oil prices remain a factor for the commodity-linked currency, the current trend mainly reflects the greenback's widespread weakness across global markets.

The Canadian dollar weakened 0.16% to around 1.38 per US dollar as a stronger US dollar and easing geopolitical tensions weighed on the loonie. The currency came under pressure as improved prospects for a Middle East ceasefire pushed oil prices lower, reducing support for the commodity-linked currency. Additional headwinds emerged after Canadian employment rose by 14.1K, below expectations, while the unemployment rate held at 6.7%, signaling a softening labor market.

The Canadian dollar strengthened toward 1.38 per US dollar as the greenback retreated following President Trump's decision to delay infrastructure strikes by two weeks in a conditional ceasefire. This relief rally stems from a sharp plunge in WTI crude after Iran agreed to reopen the Strait of Hormuz for a two-week window to facilitate negotiations. While lower energy prices typically weigh on the loonie, the broader collapse of the US dollar index to a four-week low has provided a net gain for the Canadian currency. Investors are now recalibrating the domestic outlook as the immediate threat of energy-driven stagflation recedes although the loonie continues to underperform peers like the aussie and sterling which are less tied to the petroleum complex. Treasury yields have further eroded the greenback's carry advantage even as the market remains cautious ahead of Friday’s US inflation data.