The Canadian dollar weakened slightly against the U.S. dollar on Thursday, with USD/CAD trading around C$1.3808, leaving the loonie at roughly 72.42 U.S. cents, up about 0.02% from Wednesday’s close near C$1.3805.
On Wednesday, the loonie had shed approximately 0.2% to C$1.3805 per dollar after strengthening as high as C$1.3767 earlier in the session.
Brent crude held above $100 a barrel, trading around $102, while U.S. crude (WTI) hovered near $97. The higher oil price environment, fueled by escalating U.S.-Iran hostilities and concerns over Middle East energy flows, traditionally supports Canada’s commodity-linked currency through improved trade income. But that tailwind was offset by broad risk aversion and lingering uncertainty in Canada-U.S. trade relations.
Investors were also turning their attention to upcoming U.S. producer-price data and other inflation indicators, which will help shape expectations for the Federal Reserve’s next policy moves. Rising energy costs added another layer of complexity to the inflation outlook, heightening the risk that elevated fuel prices could keep price pressures stubbornly high.
