USD/CAD Rises Above 1.3550 as US Dollar Strengthens Amid Geopolitical Risks

USD/CAD Climbs Above 1.3550 on Geopolitical Tensions and Stronger US Dollar

The USD/CAD pair continued its upward momentum, trading near 1.3580 in early Tuesday Asian trading, as the US Dollar gained strength amid persistent Middle East geopolitical risks and investor caution ahead of the US May Retail Sales release.

Geopolitical Tensions Support USD Strength

Market participants remain focused on the Israel-Iran conflict, with the risk of further escalation supporting safe-haven flows into the Greenback. Following Israel’s Friday strikes on Iran, concerns over broader regional instability have fueled renewed demand for the USD, placing downward pressure on the Canadian Dollar.

There were brief signs of possible de-escalation, as Iran reportedly reached out to countries like Saudi Arabia, asking them to urge former US President Donald Trump to pressure Israel for a ceasefire. However, no formal agreement has been reached, and uncertainty lingers.

Upcoming US Retail Sales in Focus

Investors now turn their attention to the US May Retail Sales report, scheduled for release later today. Strong data could reinforce the US Dollar's bullish bias, while weak figures might cap further gains in USD/CAD.

Canada’s Tariff Talks With the US

On the Canadian front, Prime Minister Mark Carney stated on Monday that he and Trump had reached a mutual understanding to resolve tariff disagreements within 30 days. While this is a positive development, the CAD remains under pressure due to the broader market's focus on risk-off sentiment and US economic data.

Conclusion

As geopolitical tensions in the Middle East continue to dominate headlines, the USD/CAD pair is likely to remain supported, especially if upcoming US economic data reinforces Dollar strength. With traders on edge and global uncertainty high, short-term moves will likely be driven by news from both Washington and the Middle East.