Canadian Dollar Gains on US‑Iran Peace Deal
The Canadian dollar appreciated modestly on Monday, trading 0.1 % higher at 1.3980 per U.S. dollar (71.53 U.S. cents) and moving within a narrow band of 1.3951 to 1.3992 after news of a preliminary peace agreement between the United States and Iran lifted global investor sentiment. The loonie had touched a seven‑month low of 1.4023 against the dollar the previous Thursday.
Speculative positioning on the currency shifted sharply, with non‑commercial net short contracts climbing to 119,999 as of 9 June, up from 94,111 the week before, according to data released by the U.S. Commodity Futures Trading Commission on Friday. This represents the highest bearish stance on the Canadian dollar since December.
Crude oil, Canada’s principal export, fell 5.5 % to $80.23 per barrel on expectations that the Strait of Hormuz would reopen, contributing to the broader decline in oil prices that accompanied the market rally.
Global equity and bond markets rallied, and oil price declines were attributed to expectations that the peace deal would ease inflationary pressures worldwide and reduce the need for further interest‑rate hikes. The Federal Reserve’s new chairman, Kevin Warsh, is scheduled to discuss the economic outlook and interest‑rate policy in a press conference following the Fed’s June 16‑17 policy meeting.