USD/CAD rebounds to near 1.3600 as Oil prices correct downwards, G7 Summit eyed

• USD/CAD edges higher as the commodity-linked CAD struggles lower Oil prices.
• WTI price may regain its ground amid rising concerns over supply disruptions, driven by heightened geopolitical Middle-East tensions.
• Treasury Secretary Scott Bessent, along with the President Trump, will meet with Canadian Prime Minister Mark Carney during G7 summit.

USD/CAD is trading around 1.3600 during the Asian hours on Monday after rebounding from eight-month low of 1.3566, which was recorded on June 13. The pair gains ground as the commodity-linked Canadian Dollar (CAD) faces challenges due to a decline in the crude Oil prices. This is important to note that Canada is the largest crude supplier to the United States (US), the largest Oil consumer.

West Texas Intermediate (WTI) Oil price is trading around $71.90 per barrel after pulling back from five-month high of $74.74, which was recorded on June 13. However, the downside of the Oil prices seems limited due to heightened fears of supply disruptions amid rising geopolitical tensions in the Middle East.

Israel and Iran continue attacking each other despite international calls for diplomacy and de-escalation, per CNN. Iran fired multiple waves of ballistic missiles toward Israel. The Iranian Revolutionary Guard said their missiles successfully targeted Israeli military-industrial centers and fuel facilities.

Iran informed mediators Qatar and Oman that it will not enter negotiations while under attack. A source denied reports that Tehran had approached Oman and Qatar with a request to engage the United States (US) to broker a ceasefire with Israel.

The USD/CAD pair also receives support from increased safe-haven demand amid rising tensions between Israel and Iran. Moreover, the University of Michigan (UoM) reported on Friday that the Consumer Sentiment Index climbed to 60.5 in June, surpassing market expectations of 53.5. The prior reading was 52.2 prior. Traders expect the US Federal Reserve (Fed) to keep its policy rate unchanged within the 4.25%-4.50% range in its upcoming decision on Wednesday.

However, the Canadian Dollar (CAD) received supported from optimism surrounding the potential Canada-US trade deal ahead of the upcoming G7 summit scheduled for June 16-17. US Treasury Secretary Scott Bessent will attend the summit in Canada alongside US President Donald Trump and meet with Canadian Prime Minister Mark Carney.