FX.co ★ Canadian Dollar Close to December-Lows

The Canadian dollar was trading near 1.39 per USD, hovering close to its weakest level since December 2025, as markets reacted to the latest developments in the Middle East. US President Trump pledged more aggressive action against Iran but stopped short of outlining concrete plans to reopen the Strait of Hormuz. Crude oil prices remained near their 2022 highs, stoking inflation concerns and lending further support to the US dollar. The loonie depreciated by about 2% in March, its sharpest monthly decline since December 2024. In its most recent decision, the Bank of Canada left its benchmark interest rate unchanged at 2.25%, stating that it was too early to gauge the economic fallout from the conflict, while money markets continued to price in roughly 41 basis points of additional tightening this year.