Crude oil prices extended their gains amid concerns over potential supply disruptions in the Middle East and lower-than-expected US crude inventories. The stronger energy market provided fresh support for commodity-exporting currencies, particularly the Canadian Dollar.

USD/CAD moved lower as higher oil prices boosted demand for the Canadian currency. Investors also remain optimistic about Canada's economic outlook, increasing speculation that the Bank of Canada may maintain its current policy stance for longer than previously anticipated.

In Europe, the Euro recovered modestly following stronger-than-expected economic indicators across several Eurozone economies. However, concerns over slowing regional growth and softer business activity continued to limit the currency's upside momentum.

Market participants are expected to remain focused on geopolitical developments and energy prices, both of which continue to play a significant role in driving global currency movements. Oil market volatility is likely to remain a key catalyst for USD/CAD in the near term.