FXStreet reported the Canadian dollar remained near a six-week high Monday, as lower oil prices challenged the currency’s strength against a softer U.S. dollar in early trading.
The outlet put USD/CAD at about 1.3965 at 3:46 a.m. ET (08:46 UTC), after a modest rise during the session. It said the pair was close to its lowest reading since Sept. 16, a level reached Friday. A USD/CAD quote indicates how many Canadian dollars one U.S. dollar buys, so a lower figure reflects a stronger loonie.
At 4 a.m. ET (09:00 UTC), Brent stood at $109.23 a barrel after falling $4.20; U.S. West Texas Intermediate was at $100.14 after losing $3.98, Reuters reported. The declines equaled 3.7% for Brent and 3.8% for West Texas Intermediate. Reuters connected the retreat to hopes that talks involving Iran and Qatar could reduce disruptions to Middle East oil supplies. Brent had ended October at a six-month high, the news agency reported.
The diplomatic plan remained a proposal. Iranian Foreign Minister Abbas Araghchi told Al Jazeera that a plan discussed through Qatari and Pakistani mediation would call for U.S. measures on the first day and reopening the Strait of Hormuz the next day, conditional on Washington meeting Iran’s demands.
An earlier Reuters snapshot from Asian trading described major currencies as broadly rangebound, with the dollar at 101.94 against a basket. FXStreet attributed some of the loonie’s resilience to reduced demand for the U.S. dollar, which it said helped cushion the effect of cheaper crude. The Bank of Canada raised its overnight-rate target by 25 basis points to 2.5% on Oct. 28. The central bank said another increase could be needed, while signaling it would proceed carefully amid uncertainty. It cited the risk that high energy costs could spread to other prices. Its next rate announcement is scheduled for Dec. 9.
The ISM Manufacturing PMI is due at 10 a.m. ET (15:00 UTC) Monday. The U.S. Employment Situation and Canada’s Labour Force Survey are scheduled for Friday, Nov. 6, at 8:30 a.m. ET (13:30 UTC).
