Loonie Soars Near Two-Month Highs as Oil Prices Rally
The Canadian dollar has reached its strongest level in two months against the US dollar, boosted by rising oil prices and a weakening greenback. As of mid-February 2026, USD/CAD hovers around 1.34, down from over 1.38 in late 2025, reflecting a roughly 3% appreciation of the loonie.
The move is attributed to the close link between Canada's commodity exports and its currency. With West Texas Intermediate (WTI) crude climbing above $78 per barrel on supply concerns and improved global demand forecasts, Canada benefits from higher crude values, increasing demand for Canadian dollars from foreign buyers of energy.
Market analysts point to resilient Canadian economic data, including stronger-than-expected employment figures and retail sales, which have reduced bets on aggressive Bank of Canada rate cuts. The central bank has held its policy rate at 4.25% since January, signaling a cautious approach amid mixed inflation signals.