Canada's Loonie Takes Hit as Oil Prices Plummet

The Canadian dollar is under pressure in early New York trading due to lower oil prices and widening interest rate spreads between Canada and the US. The Bank of Canada left its benchmark rate on hold on July 15, but odds are rising for a Fed rate hike this week.

Oil prices have slid significantly following Washington's pause in its bombing campaign against Iran, with WTI oil trading at $83.20 in New York compared to Friday's level of $92.86. This decline has weighed on the Canadian dollar, which is not benefitting from the broad US dollar sell-off.

The positive sentiment may prove fleeting as Iran claims to control the Strait of Hormuz and the Houthi's have disrupted shipping in the Red Sea.