Forex News: Canadian Dollar Slides As Crude Oil Prices Drop

Canadian Dollar Slides As Crude Oil Prices Drop

(RTTNews) - The Canadian dollar weakened against other major currencies in the European session on Friday, as the crude oil prices dropped due to lingering worries that an escalating Israel-Iran conflict may touch upon oil infrastructure. Iran has in the past threatened to close the Strait of Hormuz to traffic in retaliation for Western pressure and such a move could restrict trade and affect global oil prices, analysts say.

The Strait of Hormuz is a key shipping lane through which an estimated fifth of global oil supply flows.

Brent crude futures fell over 2 percent to $77.23 per barrel but still headed for a strong weekly gain of 4 percent.

WTI crude futures, which didn't settle on Thursday due to a federal holiday, were up 0.6 percent at $73.96.

As the Israel-Iran conflict enters its eighth day, both countries traded barrages of missiles and drones.

Residents in southern Israel have been rocked by more Iranian missile strikes while Israel has continued to hit dozens of targets in Iran.

Meanwhile, the White House said a final decision on whether to support Israeli military action against Tehran could come within two weeks.

Trump was holding off on final decision to see if Tehran gives up its nuclear program, the Wall Street Journal reported, citing sources.

Separate reports suggest that the U.S. will launch strikes against Iran only if the so-called "bunker buster" bomb was guaranteed to destroy Iran's deep-underground Fordow nuclear site.

In the European trading today, the Canadian dollar fell to a 1-week low of 1.5790 against the euro, from an early high of 1.5760. The next possible downside target for the loonie is found around the 1.59 region.

The loonie dropped to 106.02 against the yen, from an early high of 106.23. On the downside, 104.00 is seen as the next support level for the loonie.

Against the U.S. and the Australian dollars, the loonie edged down to 1.3711 and 0.8894 from early highs of 1.3688 and 0.8870. If the loonie extends its downtrend, it is likely to find support around 1.39 against the greenback and 0.90 against the aussie.

Looking ahead, Canada new housing price index for May, retail sales data for April, PPI for May, raw material prices data for May, U.S. Philadelphia Fed manufacturing index for June, U.S. Consumer Board's leading index for May, U.S. Baker Hughes oil rig count data and Eurozone flash consumer confidence for June are slated for release in the New York session.

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