CAD vs USD: What Is Happening Right Now
USD/CAD Is Falling Before a Major Event
Currency prices react before the event, not after – participants lighten USD exposure when outcomes turn uncertain – the pair drifts south as a result.
Comparable case
In 2019, the Dollar softened for days ahead of US-China trade announcements as positions shrank. A similar pre talk retreat unfolds now.
Why The Canadian Dollar Is Stronger
Traders Offload USD
The Dollar serves as the world’s reserve and safe haven – before high stakes diplomacy, portfolios shed greenback assets to curb risk. That selling weighs on USD and leaves CAD steadier by comparison.
If global investors shift just 2% of their money out of USD assets into commodities or stocks, the US Dollar drops across the board. The Canadian Dollar often moves higher—even if Canadian economic data isn’t impressive.
Oil Sensitivity Gives CAD an Edge
Canada exports a ton of oil, so the loonie usually gets stronger when there’s talk of oil supply risk.
Any tension between the US and Iran matters here, since Iran is a big oil producer. Even a hint of supply trouble is enough to lift oil prices and boost oil-linked currencies like CAD. Here’s how traders think:
- Middle East tension ramps up.
- Oil prices jump.
- CAD rallies against the USD.
Honestly, this CAD-oil connection is one of the most reliable patterns in forex.
Risk-On Mood Lifts Commodity Currencies
When markets feel calm or even a bit hopeful, investors pull out of safe-haven dollars and look for growth elsewhere—like CAD, AUD, or NZD. With stocks holding steady right now, the demand for USD falls, and CAD keeps outperforming.
For example, if global stocks climb 1–2% in a day, traders often dump USD and buy CAD or AUD instead. Moves like this can push USD/CAD down by 50–100 pips in a single session.Positioning Ahead of US-Iran Talks
Forex is all about pricing in what’s coming next. Before big geopolitical talks, traders don’t want to be stuck holding too many dollars, especially if the outcome shakes up:
- Oil supply
- Inflation expectations
- Risk appetite
- Energy trade
That’s a big reason CAD keeps rising—it’s not just about Canada, it’s about shrinking USD bets.
Take 2015 for example: Before the Iran nuclear deal was announced, oil currencies rallied just on anticipation of changes in the energy market.
How US-Iran Talks Could Move USD/CAD
 If tensions flare up:
- Oil jumps.
- CAD strengthens.
- USD/CAD drops.
 If a deal looks likely:
- Oil supply should pick up.
- Oil prices soften.
- CAD loses steam, and USD bounces
That’s why traders stay nimble—either direction is on the table.
USD/CAD Technical Set-Up
Right now, USD/CAD is hanging near a key support area in the mid-1.36s. This spot has been a major pivot lately. If you are going for trading, please first take a look at WORLD’S BEST FOREX BROKERS for 2026, which will help you to find the best Forex Brokers in your area.Â
Here’s what traders watch for:
If USD/CAD breaks below that support, momentum traders pile in, and the pair could fall 100–150 pips.
If support holds, shorts cover, and we could see a bounce back toward 1.38.
What’s Next for Traders
Everyone’s watching three things:
- US-Iran headlines
- Oil price moves
- Overall USD direction
Until there’s a clear outcome, CAD probably stays strong while the USD remains on the defensive.
Conclusion: CAD’s Strength Is All About Positioning
The Canadian Dollar is beating the greenback because traders are shifting their bets ahead of these big geopolitical talks.
The main drivers:
- Traders selling USD before the event
- The tight link between CAD and oil
- A risk-on market mood
- Uncertainty around the event
If US-Iran tensions heat up, CAD likely gets even stronger. If things calm down, USD could make a comeback.