USD/CAD eased to around 1.4000 during Asian trading hours on Monday as the US dollar softened after President Donald Trump ruled out an immediate military strike on Iran, reducing demand for the currency as a safe haven. By MacroHerald’s own measurement at 01:50 GMT on 26 October, the pair stood at 1.4004, near its 31-day low.
Trump remarks cool tensions
Trump said “there will not be a strike today,” a remark reported by Al Jazeera that eased some of the geopolitical anxiety that had been supporting the dollar. Reduced safe-haven flows left the greenback softer against several currencies, including the Canadian dollar.
Traders assign a 90.6 percent probability to the Federal Reserve holding rates steady at its October 27-28 meeting, according to the CME FedWatch Tool, alongside a 79.7 percent chance of a rate hike in December.
Canadian growth outlook in focus
Analysts at Royal Bank of Canada said housing markets remain weak and expect August GDP figures, due the following Friday, to confirm that growth slowed in the third quarter after surging in the second. Strategists at OCBC said AI-related jitters favour the Japanese yen, that Middle East tensions support the Canadian dollar and the Norwegian krone, and that French fiscal stress benefits the Swiss franc.
On the charts, USD/CAD’s 14-day relative strength index reads 37 on the daily chart. Immediate resistance sits at the 50-period exponential moving average near 1.4067, with the nine-period exponential moving average at 1.4073 and a horizontal resistance level at 1.4300 above that. Initial support lies at 1.3732, with a structural support level further down at 1.3482.
Related: Pound nears 1.3400 as dollar eases on softer Treasury yields
Source: Bank of Canada | Data: Swissquote
