Canadian Dollar pares gains further as risk aversion grips holiday-thinned markets

• The Canadian Dollar backslid against the Greenback for a third straight day.
• The Loonie push, bolstered entirely by bearish US Dollar flows, is getting hammered by souring investor sentiment.
• Middle East tensions continue to rise as the Trump administration weighs getting involved structurally.

The Canadian Dollar pared recent gains on Thursday, declining against the US Dollar for a third straight day. Global markets are turning increasingly sour on the Trump administration not only failing to quickly and quietly resolve the Israel-Iran conflict, but openly floating the idea that they might directly involve American military assets in the altercation.

Economic data remains limited on the Loonie side; however, CAD traders will be looking forward to next week's Canadian Consumer Price Index (CPI) inflation print. It's been a particularly dry run on the Canadian side of the economic data docket since the Bank of Canada's (BoC) last rate call, where the BoC snapped a seven-straight rate-cutting streak.

Daily digest market movers: US markets dark for midweek holiday, but market tensions continue to climb

• The Canadian Dollar shed weight against the US Dollar, pushing the USD/CAD pair back up to the 1.3700 handle.
• Market tensions are on the rise as the Israel-Iran conflict continues to spin up.
• According to reporting outlets, the Trump administration is actively engaging in talks with Iranian officials.
• Despite back-channel talks, President Donald Trump is still considering getting the US involved directly in the altercation, which would represent the first time the US directly deployed military assets to a foreign country since the 2003 invasion of Iraq.
• Despite insistence from the Israeli government for an answer on the US's involvement in a day or two, US White House Press Secretary Karoline Leavitt announced that the Trump team would make a decision "in a couple of weeks", a famously popular timeline for Trump watchers.

Canadian Dollar price forecast

A third straight day of declines has forced the Loonie into lower territory against the US Dollar, pushing USD/CAD back into the 1.3700 region. A near-term bull run might run out of room quickly, as downward trendlines from the multi-decade peaks set in January are still in play.

USD/CAD daily chart