FX.co ★ Canadian Dollar Eases from 8-Month High

In June, the Canadian dollar weakened, approaching the 1.37 mark against the US dollar, following a recent high of 1.357 on June 16th—the strongest level in over eight months. This decline has been influenced by a potential divergence in monetary policy between Canada and the US, alongside softer commodity signals and a shift towards geopolitical safe-haven assets. Currently, traders are anticipating a more aggressive easing approach by the Bank of Canada compared to the Federal Reserve, which is narrowing yield differentials and diminishing the Canadian dollar's carry advantage. On the domestic front, the economic outlook remains uncertain due to sluggish private consumption in the first quarter, which showed a 0.4% decline quarter-on-quarter, coupled with looming trade tariffs on Canadian goods. Additionally, rising tensions between Israel and Iran have further bolstered the US dollar's attractiveness.