Loonie Slides for a Second Week as Energy Markets Pull Back

The Canadian dollar continued to lose ground against the U.S. dollar on Friday, extending its weekly decline as global oil prices moved lower. The currency, often called the “loonie,” reflects Canada’s strong dependence on energy exports, making it sensitive to fluctuations in crude oil markets.

On Friday, the CAD traded slightly weaker at around 1.3975 per U.S. dollar after moving within a narrow intraday range. Earlier in the week, it reached its lowest level since November, briefly touching 1.4023.

Overall, the currency is down for the week as market sentiment remains cautious.

Oil Prices Under Pressure from Geopolitical Developments

Crude oil prices declined sharply, falling nearly 4%, as investors reacted to signs of potential diplomatic progress in the Middle East. Expectations of reduced geopolitical risk eased concerns about supply disruptions, leading to softer energy prices.

Since oil is one of Canada’s key exports, weaker crude prices tend to weigh directly on the Canadian dollar by reducing expected export revenues.

Broader Market Context

The U.S. dollar remained relatively stable against major global currencies as traders waited for confirmation of potential developments in Middle East negotiations. Meanwhile, Canadian bond yields showed mixed movement, with little directional conviction across maturities.