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  • Writer's pictureSieracki Milosz

The Potential Impact of Oil Prices on USDCAD: A Closer Look

US and Canadian dollars against the backdrop of stock market charts and oil refiners

In the fast-paced world of financial markets, every move counts, and staying informed is key to making profitable decisions. One such recent development that's been making waves is the surge in WTI crude oil prices, which crossed the $87 per barrel mark on Monday, reaching its highest point in over nine months. This surge has prompted traders and investors to consider various implications, one of which is the potential impact on the USDCAD currency pair.

The Current Landscape

Before delving into the potential effects, let's take a closer look at the current financial landscape. The Reserve Bank of Australia (RBA) recently held its rate steady in its latest meeting, suggesting a lack of significant market-moving events in the short term. However, there's an intriguing question looming: will this rate decision have a more significant impact on the Australian dollar (AUD) than the upcoming Australian GDP figures set to release tomorrow?

Assessing the AUD/USD

The AUD has been under the spotlight due to discussions of its undervaluation. This situation warrants keeping a watchful eye on the AUD/USD currency pair. A target of $0.6520 is emerging as a potential upside for the pair, indicating a possible rally in the Australian dollar.

The Bank of Canada's Decision

Similarly, the Bank of Canada (BoC) is scheduled to announce its interest rate decision later this week. While the consensus suggests that this decision may not have a significant impact on the USDCAD pair, it's essential to consider all possibilities. Recent opposition to a rate hike from notable Canadian figures like David Eby and Doug Ford has added an element of uncertainty.

The Crude Oil Factor

Returning to the central theme of this article, the surge in WTI crude oil prices has been a significant factor in recent market movements. Oil prices have risen steadily, with WTI currently trading at $86.398 per barrel. The anticipation of Saudi Arabia and OPEC+ implementing oil production cuts is fueling this bullish trend.

WTI USD trading view market blackbull 05-08-2023

Exploring the Relationship

Now, let's explore the potential relationship between oil prices and the USDCAD pair. As previously mentioned, the USDCAD recently experienced a bounce off the $1.3639 level, coinciding with the surge in oil prices. This could indicate that the most notable resistance level for the pair at the moment is influenced by the oil market's dynamics.


In conclusion, the surge in WTI crude oil prices is a notable development that could have implications for the USDCAD currency pair. While the RBA and BoC rate decisions may not be the primary drivers in the short term, the relationship between oil prices and the USDCAD should not be underestimated. Traders and investors should keep a close eye on both the oil market and the currency pair, as they may continue to influence each other in the coming weeks.


1. What is the significance of the $85 per barrel mark for WTI crude oil?

The $85 per barrel mark for WTI crude oil represents its highest point in over nine months, indicating a significant bullish trend in the oil market.

2. How might the RBA's rate decision impact the AUD/USD currency pair?

While the RBA's rate decision may not have an immediate impact, it can influence the Australian dollar's value in the long term, depending on its stance on monetary policy.

3. What factors are contributing to the potential undervaluation of the Australian dollar?

Discussions of the Australian dollar's undervaluation are driven by various economic and geopolitical factors, including trade relationships and economic stability.

4. Why is the Bank of Canada's interest rate decision generating interest in the financial markets?

The BoC's interest rate decision is noteworthy due to recent opposition to a rate hike from prominent Canadian figures, creating uncertainty in the financial markets.

5. How should traders approach the potential relationship between oil prices and the USDCAD pair?

Traders should closely monitor both oil prices and the USDCAD pair, as they may continue to influence each other. It's essential to stay informed and adapt to changing market dynamics.

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