The Canadian dollar strengthened on Monday as global oil prices surged above $100 per barrel following additional production cuts from several countries. The rally in crude prices comes amid growing supply concerns linked to a near blockage of the Strait of Hormuz, one of the world’s most important oil shipping routes.
As a result, the USD/CAD exchange rate declined by 0.3% to 1.3534 as of 7:48 a.m. in Toronto, putting the pair on track for its lowest closing level since February 11, 2026. The move reflects increased demand for the Canadian dollar, which tends to benefit when oil prices rise due to Canada’s role as a major energy exporter.
Both WTI crude and Brent oil futures climbed above the $100 mark after several countries reduced oil output in response to the situation surrounding the Strait of Hormuz. The supply cuts have intensified fears of tighter global oil availability, pushing energy prices higher.
According to analysts at Scotiabank, the surge in crude prices is improving Canada’s economic outlook through stronger trade dynamics. Shaun Osborne and Eric Theoret noted in a client report that higher oil prices, combined with a narrower Western Canada Select (WCS) discount relative to WTI, are boosting the Canadian dollar by strengthening Canada’s terms of trade.
