USD/CAD hovers below 1.3820, retreats from the highs since March

• USD/CAD halts the winning streak due to the rise in Crude oil prices.
• Crude oil prices surge as the US military strikes on Iranian targets in Syria.
• Traders expect that the Fed will keep interest rates unchanged in the upcoming meeting.

USD/CAD snaps a three-day winning streak, retreating from the seven-month highs. The spot price trades around 1.3820 during the early European session on Friday. The pair faces challenges due to the higher Crude oil prices amid geopolitical tension pertaining to the Israel-Hamas conflict.

Western Texas Intermediate (WTI) trades higher near $84.20 per barrel by the press time. The surge in crude oil prices comes in the aftermath of US military strikes on Iranian targets in Syria, raising fears of an escalation in the Israel-Hamas conflict. Moreover, the Israeli armed forces initiated the biggest overnight attack on Gaza since the beginning of the conflict, a development that carries the potential to incite anger among Arab nations.

The US Dollar (USD) hovers around 106.60, with the positive tone as US Treasury yields rebound after the recent losses registered in the previous day. The yield on 10-year US bonds trades at 4.87% by the press time.

US Dollar might have received support from the sentiment generated by the robust US preliminary Gross Domestic Product (GDP) Annualized data. US GDP improved to 4.9% in Q3 from the previous growth of 2.1%, exceeding the market expectation of 4.2%.

However, the report unveiled a preliminary core Personal Consumption Expenditure (PCE) that fell short of expectations. US Core PCE declined to 2.4% in Q3 from the previously recorded 3.7%.

Investors expect that the US Federal Reserve (Fed) will keep policy rates unchanged in the Federal Open Market Committee (FOMC) meeting next week. The US Core Personal Consumption Expenditure (PCE) Price Index is set to be released during the North American session, seeking fresh impetus on inflationary pressure in the US.