The US Dollar strengthened against both the Canadian Dollar and the Swiss Franc during the Asian session on Monday, driven by heightened geopolitical risks and diverging economic data [1][2]. The USD/CAD pair attracted buyers for the second consecutive day, reclaiming the 1.3800 mark, although it remained below the recent high of 1.3870 reached last week [1]. This movement was supported by ongoing uncertainty surrounding US-Iran negotiations, with Iran's chief negotiator, Mohammad Bagher Qalibaf, insisting that Iran will not accept any agreement until its national rights are fully secured [1]. Reports also indicate that the US has hardened its negotiating stance, and market bets suggest the US Federal Reserve may hike interest rates by the end of the year, further underpinning the US Dollar [1].
The Canadian Dollar was pressured by disappointing domestic GDP figures, which showed a contraction at a 0.1% annualized pace in the first quarter of 2026 [1]. However, a recovery in crude oil prices from a one-month low helped limit further downside for the commodity-linked Loonie [1]. Analysts noted that it would be prudent to wait for strong follow-through buying before positioning for a resumption of the recent uptrend in USD/CAD [1].
Meanwhile, the USD/CHF pair gained ground after two days of losses, trading around 0.7830 as the Swiss Franc weakened ahead of key economic data releases, including Swiss Real Retail Sales for April, Q1 GDP, and May’s SVME-PMI [2]. The US Dollar's strength was attributed to increased safe-haven demand amid fluid developments in US-Iran peace negotiations [2]. US President Donald Trump reportedly seeks to reinforce several key terms of the proposal aimed at ending the US-Israel war on Iran, specifically targeting regulations around the Strait of Hormuz and the removal of highly enriched uranium [2]. Axios reported that Trump wants to tighten multiple points of the deal, and a senior US official stated that Iran's formal response to these changes could take up to three days [2].
Geopolitical uncertainty intensified as Israel ordered its troops to advance further into Lebanon, escalating its conflict with the Iran-backed Hezbollah group despite a ceasefire agreement announced more than six weeks ago [2]. This escalation threatens to unravel earlier diplomatic progress and has contributed to the safe-haven demand for the US Dollar [2].
CONCLUSION
The US Dollar has gained strength against both the Canadian Dollar and Swiss Franc, supported by geopolitical tensions and diverging economic data. While the Canadian Dollar is weighed down by weak GDP figures, the Swiss Franc is pressured ahead of key economic releases and ongoing Middle East uncertainty. Market participants remain cautious, awaiting further developments in US-Iran negotiations and potential central bank actions.