Canadian Dollar Rebounded to Near 1-Month Highs

2026-03-06 17:57 By Felipe Alarcon 1 min. read

The Canadian dollar strengthened past 1.37 per US dollar, outperforming its G7 peers and reached a near 1-month high as the simultaneous impact of surging energy prices and a cooling US labor market reshaped the North American monetary landscape.

This appreciation is primarily driven by a surge in WTI crude oil past 92$ per barrel which has increased foreign currency inflows into Canada's energy-heavy economy.

The loonie found additional support from the closure of the Strait of Hormuz which highlighted Canada as a secure energy provider for the US.

The Bank of Canada has further supported the currency by maintaining a steady 2.25% policy rate since January to address sticky headline inflation of 2.3% and a tight 6.5% unemployment rate.

Unlike the Federal Reserve which now faces pressure for July rate cuts, after the unexpected loss of 92K US jobs triggered a decline in the dollar index, the Canadian central bank's firm stance offers a yield buffer against 10% US import tax threats.



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