USD/CAD ticks up from 1.3690 with lower Oil prices hurting the loonie

• The Canadian Dollar trims gains, weighed by lower Oil prices.
• The truce between Israel and Iran is keeping Crude prices 16% below Monday's highs.
• Weak US data nd hopes of Fed easing are keeping USD's upside attempts limited.

The broad-based US Dollar's reversal following the announcement of a ceasefire in the Middle East has been hollower against the Canadian Dollar, with downside attempts capped near 1.3700. The sharp decline in Oil prices is acting as a headwind for the commodity-sensitive Canadian Dollar.

A moderate optimism keeps risk appetite alive on Wednesday, in the absence of key macroeconomic data, but the bearish pressure on the US Dollar seems to have eased. The USD7CAD is showing marginal gains on Wednesday, trimming losses after a 0.2% decline over the previous two days.

The CAD struggles amid low Oil prices

The Canadian Dollar has been hit by a 16% decline in the price of Oil, Canada's main import. The recent attacks on Iran seem to have spared the country's main Oil plants, keeping its supply capacity intact

Apart from that, the ceasefire seems to have moved away the threat of a blockade in the strategic Strait of Hormuz, which was the main driver of Crude prices during the 12 days of hostilities. With a tense calm in the Middle East keeping Oil prices steady at $65, more or less where they were before the war, the Canadian Dollar is unlikely to rally.

In the US, the Fed Chair, Jerome Powell, maintained his cautious stance on his testimony to Congress, but he weak Consumer Confidence data seen and the growing divergence among the board members are keeping hopes of interest rate cuts alive. This is keeping the US Dollar's upside attempts limited.