USD/CAD Rises Toward 1.3650 on Safe-Haven Demand Despite Higher Oil Prices

USD/CAD Recovers to Mid-1.3600s on Friday

The USD/CAD currency pair is showing signs of recovery after dipping below 1.3600, rebounding toward 1.3650 in Friday's Asian session. The pair’s uptrend is driven largely by safe-haven demand for the US Dollar (USD) amid a fresh wave of global risk aversion.

Risk-Off Sentiment Boosts USD

A surge in geopolitical tensions in the Middle East and lingering trade uncertainties have reignited global demand for safe-haven assets like the USD. This has helped the Greenback bounce off multi-month lows and end its two-day losing streak.

Related: Gold Jumps Above $3,400 as Middle East Tensions Escalate

Crude Oil Prices Rally, Supporting CAD

Despite USD strength, the Canadian Dollar (CAD) has found support from rising Crude Oil prices, which have spiked over 9%, nearing five-month highs. This oil rally is fueled by supply disruption concerns in the Middle East.

At the same time, reduced expectations for further Bank of Canada (BoC) interest rate cuts and optimism around US-Canada trade cooperation are cushioning the downside for the Loonie.

Outlook: USD/CAD Faces Mixed Forces

While the USD benefits from risk-off flows, CAD continues to be supported by commodities and monetary policy sentiment. Dovish hopes from the US Federal Reserve may also limit further upside in the Greenback.

Key Resistance: 1.3660
Key Support: 1.3580