Loonie Rebounds from Two-Week Low as Oil Prices Surge Above $90

The Canadian dollar rebounded on Monday from its lowest level in over two weeks against the US dollar, driven by rising oil prices and month-end hedging flows.

Oil prices climbed above $90 a barrel, up more than 3%, after renewed tensions between the US and Iran raised concerns about global oil supplies. This boost to energy-exporting Canada typically benefits its currency.

The loonie recovered from a low of C$1.3911 earlier in the session, which was its weakest level since mid-August. It last traded around 72.0 US cents, or roughly C$1.39.

The Canadian dollar's gains were limited, however, as markets increased bets that the Federal Reserve could raise interest rates in September, supporting US Treasury yields and the dollar.