• USD/CAD receives support as the commodity-linked CAD struggles due to lower Oil prices.
• Crude Oil prices plunge due to easing fears of a potential all-out war in the Middle East.
• CME FedWatch Tool suggests a 95.8% probability of a 25-basis-point rate cut in November.

USD/CAD holds its position near 1.3890 during the Asian trading hours on Tuesday, close to its three-month high of 1.3908, recorded on Monday. The commodity-linked Canadian Dollar (CAD) faces challenges due to lower Oil prices as Canada is the largest crude exporter to the United States (US).

West Texas Intermediate (WTI) oil price trades around $67.50 at the time of writing. Oil prices have fallen sharply as the limited military operations have alleviated fears of a potential all-out war in the Middle East. Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, indicated the possibility of using "all available tools" to respond to Israel’s recent attacks on military targets in Iran, according to Reuters.

On Monday, Governor Tiff Macklem provided further details on the Bank of Canada’s (BoC) decision to implement an aggressive interest rate cut last week, explaining that the easing is reasonable given the aggressive hikes in borrowing costs aimed at controlling inflation in recent years. Macklem also noted that the central bank will need to "discover" the neutral rate that neither stimulates nor restricts economic activity, according to Bloomberg News.