USD/CAD down below 1.0530 as Oil Prices Drop on Iran Deal

The Canadian Dollar dropped to its lowest level in four months as the price of oil, Canada’s biggest export, fell after Iran and world powers reached an interim deal to set limits on its nuclear program.

The currency fell against the majority of its most-traded peers in the wake of the sixth-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, while leaving in place banking and financial measures that have hampered its crude exports. World powers will continue negotiating for a more comprehensive deal to prevent Iran from developing nuclear weapons in exchange for ending sanctions.

“There’s a longer-term view being built in there that this is going to turn open the spigot for Iranian crude oil production which would obviously impact crude oil prices negatively,” said Mark Frey, chief market strategist at Cambridge Mercantile Group, a global foreign exchange and payments provider, by phone from Victoria. “In the short term, yeah I think oil is going to trade heavy, and I think it’s going to hurt the commodity currencies and I think you’re going to see that in the Canadian dollar.”

Bloomberg

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