Loonie Ignores Oil Rally as Canadian Dollar Disconnect Reaches New Heights

The Canadian dollar has traditionally been closely tied to oil prices due to Canada's significant energy exports. However, this relationship has broken down in recent years.

In the past, the Canadian dollar would rise and fall alongside Brent crude oil prices, but since the pandemic, there have been two major oil price swings that have not affected the loonie.

One reason for this disconnect is the introduction of President Trump's tariffs, which have had a significant impact on global trade. However, the source suggests that the tariffs are not the main reason for the Canadian dollar's behavior.

The current surge in oil prices driven by the U.S., Iran conflict has provided no support to the Canadian dollar, with some calling it a 'historic high' of disconnect between the currency and crude.