USD/CAD: Oil provides backing, but upside remains limited – Commerzbank
Commerzbank’s Perspective on the Canadian Dollar
Michael Pfister from Commerzbank notes that the Canadian Dollar is beginning to see positive effects from rising oil prices. However, he points out that ongoing structural challenges and the currency’s strong connection to the US Dollar are likely to restrict any significant gains. Should oil prices remain above $100 per barrel, Canada’s real interest rate advantage over Europe could improve. Despite this, Commerzbank maintains a cautious outlook for further Canadian Dollar appreciation and holds its USD/CAD projection at 1.37 for the first half of 2026.
Oil Price Gains Versus Economic and Trade Concerns
Pfister suggests that if oil remains above $100 per barrel due to ongoing conflict in the Middle East, the Canadian Dollar could see additional support.
He also explains that in such a scenario, Canada’s real interest rate gap with many European currencies could widen, especially if European central banks are slow to raise interest rates amid sluggish economic growth.
Regarding the EUR/CAD pair, Pfister believes that a continued surge in energy prices might push the exchange rate lower, primarily because of euro weakness and improved trade conditions for Canada.
For the USD/CAD pair, he expects that a sustained move to lower levels is unlikely before the second half of the year.
As a result, Commerzbank is confident in its USD/CAD forecast of 1.37 for the first half of the year.
(This report was produced with assistance from artificial intelligence and subsequently reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
NASDAQ TRADE HALT <RIBBU.O> VOLATILITY TRADING PAUSE AT 12:14 PM
NASDAQ TRADE HALT VOLATILITY TRADING PAUSE AT 12:14 PM
Siebert CIO Says Micron Stock Is a Buy, Just Not Forever
Magna International Inc. Price Target Cut to $77.00/Share From $80.00 by TD
Ratings actions from Baystreet: http://www.baystreet.ca (END) Dow Jones Newswires October 08, 2026 11:09 ET (15:09 GMT)
Dow Jones Top Financial Services Headlines at 11 AM ET: Q&A: Bitcoin Funds Are Expanding. HANetf's Co-CEO Explains Why | Global ...
Q&A: Bitcoin Funds Are Expanding. HANetf's Co-CEO Explains Why Last week, London-based HANetf, an exchange-traded fund provider, launched the world's first euro-hedged bitcoin ETC-noting a shift in demand among its European client base. ---- Global Bond Turmoil Reveals the Surprising Resilience of Emerging Markets "It's very clear that EM is behaving differently than in the past, and EM is holding up better than expected." ---- U.K. Regulators Ready Green Light for $4 Billion ATM Tie-Up Between Brink's, NCR Atleos Authorities said the offer to sell off some parts of Brink's business should address concerns over the ATM operator's planned acquisition of its rival. ---- Choosing the Right Bond Strategy for Today's High-Yield World Before chasing higher rates, bond buyers have to figure out what type of investor they actually are. ---- Fed's Waller Sees Multiple Rate Increases Ahead to Cool Inflation In prepared remarks at the Istanbul Economic Forum, Christopher Waller said the economic data underscoring the need for interest-rate increases hasn't shifted much. ---- Financial Services Roundup: Market Talk Find insight on ABN Amro Bank, Standard Life and more in the latest Market Talks covering financial services. ---- Wells Fargo Faces Regulator Probe Over Efforts to Boost Black Homeownership Trump's Housing and Urban Development is seeking to crack down on race-based lending, calling it a potential violation of the Fair Housing Act. ---- Ripple, Crypto's Payments Giant, Breaks Into Wall Street The crypto firm is emerging as a serious player in financing leveraged ETFs, a lucrative business long dominated by big banks. ---- Venture Firm Behind Chip Startup Groq Targets $10 Billion Megafund Winning bets on hot AI startups are vaulting a little-known Dallas firm into a small group of firms raising gigantic funds. ---- How one trend-following fund outperformed rivals by bringing humans back into the decision-making process One trend-following fund has outperformed rivals this year by deciding to take profits. ---- Wal
Crypto prices
More
