Canadian Dollar receives support despite lower oil prices
USD/CAD edges lower after remaining flat in the previous day, trading around 1.3680 during the Asian hours on Thursday. However, the downside for the pair could be limited, as the commodity-linked Canadian Dollar (CAD) may face challenges amid declining oil prices, given Canada’s status as the largest crude exporter to the United States (US).
West Texas Intermediate (WTI) oil price declines after three days of gains, trading around $104.00 per barrel at the time of writing. However, crude oil prices could rebound amid a worsening naval blockade of Iranian ports and the United Arab Emirates’ (UAE) unexpected exit from the Organization of the Petroleum Exporting Countries (OPEC).
Canada’s oil and gas sector is attracting renewed attention from global energy majors as escalating Middle East tensions enhance the country’s appeal to leading operators. Shell’s $16.4 billion deal to acquire ARC Resources underscores this shift, while TotalEnergies and ConocoPhillips are reassessing Canadian peers alongside Equinor and BP.
The USD/CAD pair depreciates as the US Dollar (USD) edges lower after two days of gains. However, the Greenback may regain its ground as Federal Reserve policymakers struck a hawkish tone in their rate hold and persistent geopolitical tensions supported the safe-haven demand for the currency.
The Federal Open Market Committee (FOMC) voted 8-4 on Wednesday to keep interest rates unchanged within the 3.5%–3.75% range, marking the first instance of four dissenting votes since October 1992. The committee emphasized that “inflation remains elevated, partly due to the recent rise in global energy prices.”
Federal Reserve (Fed) Chair Jerome Powell remarked during the post-meeting press conference that he intends to remain on the Board of Governors for an indefinite period even after his tenure as chair concludes. Meanwhile, Kevin Warsh, nominated by Donald Trump as his successor, is widely seen as positioned to assume leadership at the central bank.
The story was corrected on April 30 at 2:25 GMT to say in the second paragraph that WTI is trading around $104.00 per barrel, not per troy ounce.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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