USD/CAD eases to approximately 1.3630 in the early Asian session on Thursday. An increase in crude oil prices boosts the commodity-linked Canadian Dollar. The US service sector demonstrated growth in February 2026. The USD/CAD pair declines to approximately 1.3630 in the early Asian session on Thursday. The Canadian Dollar strengthens against the Greenback as oil prices rise. Market participants will closely monitor the upcoming US weekly Initial Jobless Claims reports on Thursday.
The rising tensions between the US and Iran, along with possible supply interruptions in the Strait of Hormuz, are driving up crude oil prices and offering a degree of support to the commodity-linked Loonie. It is important to recognize that Canada stands as a significant player in the oil export market, and elevated crude oil prices typically exert a favorable influence on the CAD. “We maintain our outlook for sustained volatility, but barring a significant global growth concern stemming from the conflict, oil support is likely to enable the loonie to outperform its European counterparts,” stated strategists at Monex Europe.
However, the positive US economic data could potentially mitigate the losses of the US Dollar. The Institute for Supply Management reported on Wednesday that the Services Purchasing Managers’ Index increased to 56.1 in February compared to 53.8 previously. This figure exceeded the market consensus of 53.5. This report indicated strong economic performance and may support the USD.