The Canadian to American Dollar is trading at a multi-month low at 0.7846 as geopolitical tension, protests in Canada, and crude oil prices affect the CAD/USD.
Canadian to American Dollar at 0.7846
US Dollar to CAD was trading at 1.2732 during trading hours on Tuesday, February 15, 2022. The Canadian Dollar is fluctuating within a range between 1.2667 and 1.2761 in February 2022.
The risk-sensitive CAD/USD weakened in February. The war threat over Ukraine is causing jitters in the currency and stock markets. Further, the protest at the US-Canadian border has disrupted international business for the past week. The Canadian to American Dollar retreats to the lower range, at multi-week low levels.
The Canadian Dollar to US Dollar slipped to 0.7846 levels as protests hurt the supply chain from Canada to the US. The Russian troops have pulled off partially from the international border, and crude prices have dropped, after surging to levels last seen in 2014.
The Canadian to American Dollar is trading at 0.7846 levels on Tuesday, February 15, 2022.
Crude Prices in Canada
The threat of war between Russia and Ukraine pushes oil prices higher. Geopolitical tensions were driving oil prices higher. However, diplomatic talks are bringing a positive solution to the rising crisis. Russia has pulled back some of its military troops, and markets recovered on the news.
Oil prices rose to more than $96 per barrel, to multi-year highs, with disruptions in the supply chain. However, crude prices cooled down as Russian President Vladimir Putin says that Russia does not want a war.
Crude prices moved lower on news of a Russian pullback from the Ukraine border. Brent crude is at $92.52, and WTI crude prices are trading at $91.19 per barrel.
Canada is an oil-rich country that exports oil. The Ontario province exports to the US and the protest at the international border at Ontario is disrupting the supply chain. Export of commodities, such as crude oil, food products, and copper has come down. The Canadian Dollar to US Dollar slipped as crude exports have come down by supply disruptions and geopolitical tensions.
Protests Disrupt Canadian International Trade
Protests occurring in various parts of Canada pull the Canadian to American Dollar currency pair lower. Protesters occupy the key border crossing between Canada and the US, which disrupted international trade across its borders. Protests over the enforcement of wearing masks have caused a wide commotion in the country as thousands took to the streets.
Protestors sought the Prime Minister to lift the vaccine mandates. But Trudeau is against it.
There have been massive protests against Prime Minister Justin Trudeau. Mr. Trudeau has been in power since 2015. Conservatives in Canada oppose Trudeau’s new carbon tax. It would hurt the oil-rich economy, say conservatives. The Federal government insists that truck drivers must be vaccinated when they enter Canada from the US or undergo a 14-day quarantine.
The protest at the Ambassador Bridge is an important border crossing, says Public Safety Minister Marco Mendicino. Canadian Transport Minister Omar Alghabra says that such blockades will seriously impact the supply chains in the country.
US Dollar Weakens as War Threat Eases
The USD shot up to a two-week high towards 96.43 on February 14, as war prospects escalated. However, signs of withdrawal have kept the Dollar from surging higher. Comments from Federal Reserve President James Bullard to raise interest rates faster contributed to the rising Dollar value.
The US Dollar is trading at 96.03 during trading hours on Tuesday. The US 10-year Treasuries are above 2%, as the US Dollar strengthens in value.
Inflation in the US is at a 4-decade high. The Federal Reserve may bring a hike in interest rates by a 50 basis point next month, predict analysts.
The strong US Dollar is keeping the Canadian to American Dollar currency pair from falling lower, despite internal disturbance, geopolitical tension, and rising crude prices.
Russia Troops Pullback from the Ukraine Border
On Tuesday, Russia has opened up to diplomatic talks on the Ukraine standoff. Diplomatic talks were held between German Chancellor Olaf Scholz and Mr. Putin. The US and Britain threatened sanctions against Russia if the troops proceeded into Ukraine. NATO Secretary-General Jens Stoltenberg asks Russia to “start working for a peaceful solution”.
After much talk, Russian forces stationed across the Ukraine borders are pulling back. The partial pullback of military forces has brought some relief to the geopolitical tension caused by the war threat.
The standoff between Ukraine and Russia led to a massive troop build-up near Ukraine. On Tuesday, the first sign of a military retreat was seen as Russian troops partially pulled back from the border. Russian President Vladimir Putin is yet to take a firm decision on the Ukraine invasion.
As geopolitical tension eases, the Canadian to American Dollar may strengthen. The CAD/USD currency pair has support at the 0.7833 level.