Loonie Recovers on Rising Oil Prices, Interest Rate Hike Anticipation

The Canadian dollar has recovered from its lowest level in two weeks against the US dollar, thanks to rising oil prices and month-end hedging flows.

Oil prices have surged more than 3% after renewed tensions between the US and Iran raised concerns about global supplies. Higher crude prices typically benefit Canada's currency due to its large energy-exporting sector.

However, the loonie's gains are limited as markets increase bets that the Federal Reserve could raise interest rates in September. Fed Chair Kevin Warsh has argued that further tightening may be needed if inflation fails to move toward the central bank's 2% target.