USD/CAD weakens below 1.3700 as investors assess Israel-Iran conflict

• USD/CAD softens to around 1.3695 in Friday's Asian session. 
• Trump is still considering whether to order a US strike on Iran's nuclear program.
• Fed's hawkish hold and lower crude oil prices could help limit the pair's losses. 

The USD/CAD pair weakens to near 1.3695, snapping the three-day winning streak during the Asian trading hours on Friday. The US dollar (USD) edges lower after US President Donald Trump announced that he will decide on US involvement in the Israel-Iran conflict within two weeks. The US Philly Fed Manufacturing Index is due later on Friday.

Israeli Prime Minister Benjamin Netanyahu ordered the military to intensify attacks on "strategic targets" in Iran. His decision to escalate its military operation against Iran comes after an Iranian missile reportedly struck a major hospital in the southern city of Beersheba.  

Nonetheless, the White House said late Thursday that Trump would decide within two weeks whether to order a US strike on Iran's nuclear program. His latest stance signals a step back after a run of tough rhetoric, which lifts the riskier assets like the Canadian Dollar (CAD) and creates a headwind for the pair. Investors will watch for signs of whether the US will increase involvement in the conflict. 

The US Federal Reserve (Fed) decided to hold the interest rates steady at its June meeting on Wednesday. The US central bank signaled a slower pace of cuts in the future amid concern that Trump's tariffs could push up consumer prices. The Federal Open Market Committee (FOMC) expects to deliver two rate cuts later this year, according to the "dot plot." The hawkish hold of the Fed could provide some support to the Greenback in the near term. 

Meanwhile, a decline in Crude Oil prices might undermine the commodity-linked Loonie. It's worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.