{"id":43617,"date":"2026-03-27T21:43:33","date_gmt":"2026-03-27T21:43:33","guid":{"rendered":"https:\/\/www.vtmarketsglobal.com\/en\/uncategorized\/43617\/"},"modified":"2026-03-27T21:43:33","modified_gmt":"2026-03-27T21:43:33","slug":"usd-cad-stays-above-1-3850-as-the-us-dollar-rises-versus-the-canadian-dollar-amid-prolonged-iran-war-fears","status":"publish","type":"post","link":"https:\/\/www.vtmarketsglobal.com\/en\/live-updates\/43617\/","title":{"rendered":"USD\/CAD stays above 1.3850 as the US Dollar rises versus the Canadian Dollar amid prolonged Iran war fears"},"content":{"rendered":"USD\/CAD rose for a fifth straight day on Friday and reached its highest level in over two months. It traded at 1.3860 at the time of writing as markets moved towards safety amid fears of a longer Middle East conflict.\n\nThe Canadian Dollar was set for a weekly fall of more than 1%. Higher oil prices did not support the CAD, as demand for the US Dollar as a safe haven increased.\n\n

Middle East Conflict Drives Safe Haven Demand<\/h3>\nMixed updates on the war also weighed on market sentiment. US President Donald Trump said talks with Iran were going \u201cvery well\u201d and delayed the deadline to attack Iranian energy sites until 6 April.\n\nThe Wall Street Journal reported that the Pentagon may deploy an additional 10,000 troops for an alleged ground invasion. The report said this could prolong the war and keep the Strait of Hormuz closed for an indefinite period.\n\nCentral banks are also reviewing policy. Fed officials Michael Barr and Philip Jefferson raised concerns about rising inflation pressures linked to higher oil prices.\n\nThe CME FedWatch Tool showed a 50% chance of at least one rate hike this year. This contrasts with 50 bps of rate cuts expected a month ago and supported the US Dollar.\n\n

Policy Divergence And Options Positioning<\/h3>\nWe saw a similar pattern around this time in 2025, when escalating Middle East tensions pushed USD\/CAD to over 1.3860. The rush to the US Dollar as a safe haven overwhelmed the positive effect of higher oil prices on the loonie. That period serves as a crucial reminder of how quickly geopolitical risk can shift currency markets.\n\nLooking at today, March 27, 2026, we see unsettling echoes with renewed geopolitical stress, this time elsewhere. The CBOE Volatility Index (VIX), a key measure of market fear, has climbed from 13 to 17.5 in the past two weeks, a similar surge to what we observed in early 2025. This suggests traders are once again getting nervous and buying protection.\n\nThe market’s expectation for Federal Reserve policy is shifting dramatically, just as it did in 2025. A month ago, Fed funds futures priced in an 85% chance of two rate cuts by the end of 2026; today, that has fallen to less than 40%. In contrast, the Bank of Canada is expected to remain on hold or even signal a cut, creating a clear policy divergence.\n\nGiven this, we are seeing increased interest in buying USD\/CAD call options to position for a move higher. A cost-effective strategy could be a bullish call spread, such as buying the 1.3700 strike call and selling the 1.3900 strike call for the coming months. This approach defines the maximum risk while capturing potential upside if the pair revisits the highs we saw last year.\n\nAlthough WTI crude oil prices have climbed 8% this month to over $88 a barrel, this is failing to support the Canadian dollar. Much like the conflict-driven rally in 2025, the safe-haven demand for the US dollar is the dominant factor in the market right now. This dynamic suggests that even continued oil strength may not be enough to stop USD\/CAD from rising further.\n\nCreate your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b>\n

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Start trading now – Click here<\/a> to create your real VT Markets account <\/strong> <\/p>\r\n","protected":false},"excerpt":{"rendered":"

USD\/CAD hits two-month high as Middle East tensions, safe-haven dollar demand outweigh oil, shifting Fed expectations.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-43617","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/43617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=43617"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/43617\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=43617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=43617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=43617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}