The USD/CAD pair has been on a downward trajectory for seven consecutive sessions, trading around 1.3730 during early Monday hours. The Canadian Dollar (CAD) has strengthened, buoyed by rising crude oil prices, as Canada remains the largest crude exporter to the United States.
West Texas Intermediate (WTI) oil prices have climbed for the fourth straight day, reaching $76.20 per barrel at the time of writing. The surge in oil prices is driven by escalating supply concerns amid growing geopolitical tensions in the Middle East.
ABC News reported that the Israel Defense Forces (IDF) intercepted approximately 30 projectiles crossing from Lebanon into northern Israel early Monday. While some projectiles landed in open areas, no injuries were reported.
Over the weekend, the conflict between Israel and Gaza intensified, with an Israeli airstrike targeting a school compound, resulting in at least 90 deaths, according to the Gaza Civil Emergency Service. Israel disputed this figure, calling it exaggerated. Meanwhile, Hamas has expressed uncertainty about entering new ceasefire talks, as reported by Reuters.
Despite the pressure on the USD/CAD pair, the US Dollar (USD) is finding some support from positive US economic data released last week, which has led traders to lower their expectations for interest rate cuts by the Federal Reserve. The CME FedWatch Tool now shows a 46.5% probability of a 50-basis point rate cut at the Fed‘s September meeting, down from a 74.0% chance just a week ago.
On Sunday, Federal Reserve Governor Michelle Bowman indicated that inflation risks remain to the upside, and the labor market continues to show strength. Bowman suggested that the Federal Reserve might not be ready to cut rates at its upcoming September meeting, according to Bloomberg.
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