Loonie’s Weakening Ties to Oil Prices Amplifies Bets Against It

When oil prices surge, the Canadian dollar usually strengthens — but that dynamic has shifted.

Since the war in the Middle East erupted in late February, the loonie slipped 0.2% against the US currency as West Texas Intermediate crude oil rose roughly 34%. The divergence prompted traders to boost their bets against the Canadian dollar. Meanwhile, the Norwegian krone and Australian dollar, other commodity-linked currencies, have rallied in that period.