Markets opened Monday with the Canadian dollar firming against the U.S. dollar after oil prices climbed past the $100 per barrel mark. By 7:48 a.m. Toronto time, USD/CAD had fallen 0.3% to 1.3534, a move that placed the currency pair on track for what would be its lowest closing level since February 11, 2026.
Both West Texas Intermediate and Brent futures were trading above $100 amid reports that several countries imposed additional production cuts in response to a near blockage of the Strait of Hormuz. The rise in crude prices coincided with the improvement in the Canadian dollar, reflecting the close link between Canada’s terms of trade and global energy prices.
Analysts at Scotiabank highlighted the mechanics behind the move. In a note to clients, Shaun Osborne and Eric Theoret said: "Rising oil prices and a narrower Western Canada Select spread over WTI are supporting the currency’s performance via a lift to Canadian terms of trade." That assessment ties the oil market developments directly to the currency’s relative strength.
The immediate market reaction reported Monday morning saw traders price in the impact of both tighter physical crude market conditions and reduced supply expectations following the production cut announcements. With benchmarks trading above the four-figure level per barrel, the linkage to the Canadian dollar was evident in the currency pair’s downward move.
Data points reported intraday were limited to the currency quote and the status of oil futures, and the market commentary cited the WCS-WTI spread as a supporting factor. Beyond those items, the reporting reflected the current market snapshot and the contemporaneous view offered by Scotiabank analysts.
While the situation around the Strait of Hormuz and subsequent output decisions have put upward pressure on crude prices and bolstered the Canadian dollar, the details available in the market update focus on the immediate pricing and the bank analysts’ explanation rather than longer-term projections.
Note: This article reports market moves and commentary as presented in the market update. It reflects the figures and quotes provided for the morning session and does not extend beyond the information supplied in that update.