Canadian Dollar Holds Ground as Oil Prices Climb

The Canadian dollar traded in a narrow range against its US counterpart on Tuesday, finding support from a fresh uptick in global crude oil prices. After a period of modest weakness, the loonie steadied near the 1.3650 level against the greenback, as energy markets provided a familiar tailwind for Canada’s commodity-linked currency.

Oil Market Dynamics Support the Loonie

West Texas Intermediate (WTI) crude oil rose by approximately 1.2% during the North American session, trading above $78 per barrel. The move higher was driven by renewed supply concerns following reports of declining inventories in the United States and ongoing geopolitical tensions in key producing regions. As Canada is a major oil exporter, the Canadian dollar frequently moves in sympathy with crude prices, and Tuesday’s price action reflected that established correlation.

The currency’s stabilization comes after a softer start to the week, when the loonie slipped on broad-based US dollar strength. However, the energy-driven recovery helped the Canadian dollar recoup some of those earlier losses, keeping the USD/CAD pair within its recent trading range.