Loonie Hits Three-Month High on Oil Price Surge, Trade Talks

The Canadian dollar rose to a three-month high as oil prices increased and investors kept an eye on ongoing US-Canada trade talks. The loonie strengthened to 1.3790 per US dollar, its highest level since May 21st.

The jump in West Texas Intermediate (WTI) crude oil prices was the primary driver behind the Canadian dollar's rise, as it rose 2% to $87.50 a barrel. Oil exports are a significant contributor to Canada's economy, and when crude prices increase, markets often assume that Canada's export revenues will also improve.

Additionally, traders were keeping an eye on ongoing US-Canada trade negotiations in Washington, which aimed to ease tariffs and counter-duties. While some investors are starting to tune out trade headlines after months of back-and-forth, the talks still have an impact on currency flows.