USD/CAD, Oil Pairs in Focus as Iran Denies Contact with Trump

Geopolitical tensions surrounding Iran-US relations are creating uncertainty in oil-linked currency pairs after Iranian local media denied any direct or indirect contact with the Trump administration, contradicting earlier claims from the US side. The report, highlighted by Amena Bakr, head of Kpler's energy market and OPEC+ intelligence and a highly reputable source in the oil market, suggests potential escalation risks that could further impact crude oil prices and subsequently oil-sensitive currencies. USD/CAD and other commodity-linked pairs such as AUD/USD and NOK crosses remain vulnerable to sudden swings as traders assess the credibility gap between conflicting narratives. Elevated crude oil prices typically benefit the Canadian dollar and Norwegian krone while pressuring net oil-importing currencies like the Japanese yen and Indian rupee. Traders should monitor developments closely, as any breakdown in diplomatic channels could trigger a risk-off move, strengthening safe-haven currencies such as the US dollar, Swiss franc, and Japanese yen. Near-term positioning should account for heightened headline risk and widening spreads in oil-correlated pairs.