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2026.03.2615:16:21UTC+00Canadian Dollar Weakens to 2-Month Low

The Canadian dollar weakened beyond 1.38 per US dollar to a two-month low, as persistent geopolitical tensions and expectations of a more hawkish Federal Reserve stance boosted the greenback. This occurred even as West Texas Intermediate crude oil prices climbed above $92.00 following the effective closure of the Strait of Hormuz, leaving the commodity-linked loonie unable to capitalize amid broad US dollar strength.

Market skepticism over the prospect of de-escalation in the Middle East deepened after Iran rejected a 15-point US peace proposal and denied reports of ongoing negotiations, while the US deployed additional troops to the region. These developments have heightened inflation concerns and led traders to scale back expectations for further Federal Reserve rate cuts, with growing speculation about a possible rate hike by year-end. Rising US Treasury yields, combined with the US dollar’s role as the world’s primary reserve currency, continue to exert downward pressure on the loonie.

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