Canadian Dollar Holds Near One-Month High as Oil Gains Counter Fed Rate Hike Bets

The Canadian Dollar remains near its strongest level in a month against the US Dollar. The USD/CAD pair failed to hold onto an overnight bounce from the 1.4000 psychological mark, which had been the lowest in over a month, and attracted fresh selling pressure during the Asian session.

Support from higher crude oil prices helped offset headwinds from renewed bets on Federal Reserve rate hikes and a broadly firm US Dollar. Given Canada's role as a major oil exporter, a rally in oil tends to provide a tailwind for the loonie.

The inability of USD/CAD to sustain a recovery above 1.4000 suggests the near-term bias remains tilted toward Canadian Dollar strength. Traders now look for additional catalysts from upcoming economic data on both sides of the border.