Canadian Dollar Weakened Amid Strengthening US Greenback and Higher Oil Prices
The Canadian dollar weakened on Tuesday against its U.S. counterpart as the greenback strengthened broadly.
The USDCAD exchange rate was trading at around C$1.3878, up about 0.18% on the day.
Oil prices were providing some support for the loonie, with Brent crude around $92 a barrel and WTI near $88, both benchmarks gaining roughly 2% due to renewed Middle East tensions.
The move also came as markets positioned for the Bank of Canada's policy decision on Wednesday, with investors weighing the outlook for Canadian rates against growing expectations that the Federal Reserve could keep policy tighter for longer.
Markets were pricing a 65% probability of a Fed rate hike this month, increasing the yield advantage of U.S. assets and limiting room for the Canadian dollar to recover.