- USD/CAD depreciates as the commodity-linked Canadian Dollar gains on the oil prices rebound.
- Emirati officials seek UNSC approval for a multinational military action to restore Strait navigation, potentially using force.
- The US Dollar weakens as Trump indicated that the US will withdraw from Iran conflict within two to three weeks.
USD/CAD remains subdued for the second successive trading day, hovering around 1.3910 during the Asian hours on Wednesday. The pair depreciates as the commodity-linked Canadian Dollar (CAD) receives support from higher oil prices, given Canada’s status as the largest crude exporter to the United States (US).
West Texas Intermediate (WTI) oil price rebounds after registering over 4% losses in the previous day, trading around $98.60 per barrel at the time of writing. Oil prices rebound as the Emirati officials are lobbying for a United Nations Security Council (UNSC) resolution to authorize a multinational military mission to restore navigation in the strait, elevating risks of broader regional escalation.
The UAE is also urging the United States (US) and allied nations across Europe and Asia to form a coalition to clear mines, escort commercial vessels, and, if required, secure strategic positions along the waterway.
The USD/CAD pair also weakens as the US Dollar (USD) softens, weighed down by improving risk appetite amid rising hopes for Middle East peace. US President Donald Trump stated on Tuesday that the United States (US) would be “leaving very soon” from the Iran war, noting that a withdrawal could take place within two to three weeks.
Trump further emphasized that a formal agreement with Tehran is not a necessary condition for ending hostilities. On the Iranian side, President Masoud Pezeshkian expressed a willingness to de-escalate regional tensions if specific guarantees are met.
