Oil Prices Rebound, But Canadian Dollar Still Struggles

The Canadian Dollar remains under pressure despite oil prices rebounding above $90 on Wednesday. West Texas Intermediate (WTI) gained 0.70% after a sharp decline in previous days, but this recovery did not support the Loonie against a firmer US Dollar.

Hopes for de-escalation in the conflict between the United States and Iran weighed on energy prices, particularly after reports that Iran could reopen the Strait of Hormuz in exchange for reduced US military pressure. Saudi Arabia's efforts to restore an alternative export route are helping to ease concerns about global oil supply.

The US Dollar retains a positive bias due to the Federal Reserve's (Fed) restrictive monetary policy stance, which supports the Greenback. The recent decline in oil prices is also easing concerns about another acceleration in US inflation, keeping US Treasury yields below their recent multi-year highs.