Canadian Dollar Rises Despite Oil Price Drop

The Canadian dollar has gained strength against its US counterpart despite a drop in crude oil prices. On Tuesday, the Canadian dollar settled at US$0.7091 or US$1=C$1.4102, up from Monday's close of US$0.7085 or US$1=C$1.4114.

The outlook for interest rates is key to the market's mood, and investors are awaiting the Federal Reserve's announcement on Wednesday. Analysts expect the central bank to leave rates unchanged, but accompanying statements will be closely watched for signs of future moves. A rate hike is thought to be likely as early as September.

The situation in the Middle East continues to weigh on oil prices, with West Texas Intermediate down 4.2% at US$79.18 per barrel. However, this hasn't had a significant impact on the Canadian dollar's performance against the US dollar.