The USD/CAD currency pair is currently trading at around 1.3854, for a gain of 0.411% as at February 24, 2:36 PM Greenwich Mean Time (GMT). That the dollar has been able to claw its way back after a CAD bull run since 25 January 2016 is impressive, but the recent performance of the greenback has more to do with the price of crude oil and the sentiments expressed by major players in the oil market. It is the ongoing weakness in global markets, coupled with geopolitical uncertainty that is driving dollar strength at this juncture. The USD remains one of the most bankable currencies in the world, irrespective of the performance of the US economy or the fundamentals at home. It is weakness in emerging markets, commodities markets and persistently low levels of inflation throughout the Eurozone and Japan that are driving sentiment towards the world’s safe-haven currency. Of course, the China factor cannot be discounted since it alone is responsible for massive declines in commodities, notably Iron ore, Copper, Aluminium, Molybdenum and Zinc.

But the recent run of the Canadian dollar had precious little to do with any of those factors, bar crude oil. Recall that OPEC and non-OPEC countries recently met in Doha to discuss the possibility of freezing production to help crude oil prices stabilize and eventually rise. Initially, Russia and Saudi Arabia (other countries were present too such as Venezuela and Qatar) decided that if US oil producers would agree to cut production they may be amenable to such measures. It was then agreed that amendments to oil production output would go into effect, but oil markets and equities did not react as intended. Then earlier this week, it was announced by the Iranian oil Minister as well as prominent Saudi Arabian officials that no foreseeable cuts to crude oil production would be taking place anytime soon. This rocked the oil markets, with Brent crude oil and WTI crude oil plunging for what was a substantial loss for the day. The current price of WTI crude oil is $30.93 (-2.95%) and the current price of Brent crude oil is $32.94 (-0.99%). Take a look at the below chart is to see the daily declines in the price of these oil benchmarks: