The U.S. dollar moved higher against its Canadian counterpart on Tuesday, as declining oil prices weighed on the commodity-related Canadian currency, although caution ahead of this week’s U.S. inflation data was expected to limit the greenback’s gains.
USD/CAD was up 0.12% at 1.2595 by 09:30 a.m. ET (13:30 GMT).
The Canadian dollar was dented by a fresh decline in oil prices, after they briefly rebounded earlier Tuesday.
In the U.S., investors were eyeing this week’s consumer price inflation data due on Wednesday and producer price inflation data on Thursday for further clues on how fast the Federal Reserve will raise interest rates this year.
Monday’s recovery for global stock markets also weighed on the greenback. U.S. equities were especially boosted by news of a $2 billion infrastructure plan by the Trump administration.
The plan is part of the two-year budget agreement passed by the U.S. Congress last Friday, ending a brief government shutdown.
The agreement is set to boost federal spending by almost $300 billion and suspend the debt ceiling for a year.
The loonie was lower against the euro, with EUR/CAD climbing 0.58% to 1.5552.