Canadian dollar edges higher against US Dollar

TORONTO: The Canadian dollar (CAD) edged higher against its US counterpart ‌(USD) on Tuesday as oil prices rose and Canada’s trade data added to evidence that the domestic economy rebounded in the second quarter.

The loonie was trading 0.1% higher at 1.4190 per ​U.S. dollar, or 70.47 U.S. cents, after moving in a range of ​1.4189 to 1.4226.

Canada’s trade surplus widened to a four-year high of C$4.24 billion ($2.98 billion) in May, marking the fourth consecutive month of export growth.

The uptick was partly driven by higher oil prices after reports of attacks on vessels near the Strait of Hormuz raised concerns about disruptions to the key energy shipping route. U.S. crude futures climbed 2.8% to $70.47 a barrel, while the U.S. dollar also gained against a basket of major currencies.

BMO Capital Markets senior economist Robert Kavcic cautioned that such surpluses can be short-lived and tied to volatile oil prices, calling May’s figure “probably the high watermark for now.” Still, he noted that net exports should provide a solid boost to growth in Q2, suggesting the Canadian economy has recovered from two straight quarters of contraction — a 1% decline in Q4 2025 and a 0.1% annualized drop in Q1.

On the policy front, Canada and Turkey have formally launched free-trade agreement negotiations, according to Prime Minister Mark Carney’s office. Markets are now looking ahead to Friday’s employment data, with forecasts for a 10,000 job gain and the unemployment rate holding at 6.6%. Canadian government bond yields also rose across the curve, with the 10-year up 4.8 basis points to 3.467%, near the top of its recent range.