The Canadian dollar fell to the day’s lows against its U.S. counterpart on Tuesday as the price of oil, a major Canadian export, fell to 2017 lows amid renewed concerns over a global supply glut.
USD/CAD hit highs of 1.3495 and was at 1.3490 at 09.30 ET, up 0.34% for the day.
Oil prices fell to the lowest levels of the year after Saudi Arabia revealed that it boosted production levels last month, reversing some of the output cuts it pledged in November, as part of a deal brokered by OPEC to cut production on order to support the market.
Demand for the greenback continued to be underpinned ahead of an expected interest rate hike by the Federal Reserve at the conclusion of its two-day policy meeting on Wednesday.
With a rate hike seen as a near certainty investors were awaiting fresh cues from the Fed on the expected pace of rate hikes this year.
The Department of Labor said the producer price index rose 0.3% last month after rising 0.6% in January.
Producer prices jumped 2.2% from a year earlier, after rising 1.6% in January.
In Canada, a report on Tuesday showed that home prices rose again in February as house prices in Toronto continued to increase, underlining concerns that the city could be facing a real estate bubble.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 1.0% from January.