The Canadian dollar edged lower against the greenback on Tuesday, mainly driven by the strong USD and weaker oil prices. The loonie was trading at 1.3123 this morning, ahead of the key BoC monetary policy meeting tomorrow.
WTI oil prices dropped on Tuesday and was trading at 57.84 a barrel as geopolitical tensions with Iran and the possibility of disruptions to oil flow in the Middle East increased.
White House economic adviser, Larry Kudlow, said that the central bank should aim for price level stability and a steady dollar instead of focusing on jobs data. Kudlow further reiterated his belief that the Federal Reserve has room to reduce interest rates when it meets this month and could reverse the rate hike it imposed in December.
Iran threatened that it will take further steps to breach the 2015 nuclear accord in early September if it doesn’t receive long-sought relief from US economic sanctions. In reply, US Vice President Mike Pence warned Iran not to confuse American restraint with a lack of American resolve.