With oil prices elevated due to geopolitical tensions, the Canadian dollar typically benefits. However, the current surge in crude appears vulnerable given growing inventories, softening demand forecasts, and no material supply disruptions. If oil corrects lower as inventories and weaker China demand suggest CAD could weaken sharply. Meanwhile, the USD remains supported by Fed hesitation to commit to near-term cuts and broader geopolitical risk.

Stabilization or resolution of Middle East tensions

Continued Fed hawkish bias or stronger U.S. data

LONG USDCAD

Jun 19 2025