USD/CAD Eyes Upside as Crude Oil Drops on Iran Sanctions Waiver

Crude oil prices declined sharply following reports from Iranian media suggesting a temporary waiver on sanctions targeting Iranian crude exports, a development with direct implications for oil-sensitive currency pairs. The drop in oil prices pressures the Canadian dollar, which is closely correlated with energy markets, potentially lifting USD/CAD. A sanctions waiver would increase global crude supply at a time when demand growth remains uncertain, weighing further on WTI and Brent benchmarks. Improved global risk sentiment accompanied the move, as lower energy costs ease inflationary pressures across major economies. For the Bank of Canada, sustained lower oil prices could reduce export revenues and weigh on GDP growth, potentially reinforcing a dovish policy stance. Traders monitoring USD/CAD should watch for a test of near-term resistance if oil continues to weaken. Meanwhile, commodity-linked currencies such as the Norwegian krone (NOK) and Australian dollar may also face headwinds. Key support for crude oil lies at recent swing lows, with further downside likely to amplify CAD weakness.