The Canadian dollar moved lower against the U.S. dollar on Tuesday after reaching a multi-week high in the previous session, with investors shifting attention toward upcoming central bank decisions and Canada’s fiscal update.

The loonie weakened by roughly 0.4% during the session after recently touching its strongest level in nearly seven weeks. Currency markets also reflected broader strength in the U.S. dollar against several major global currencies.

Market analysts noted that optimism tied to a major acquisition in Canada’s energy sector may have temporarily supported the Canadian dollar earlier in the week. On Monday, Shell announced an agreement to acquire ARC Resources in a deal valued at more than $16 billion, drawing renewed attention to investment opportunities within Canada’s energy industry.

Investors are also awaiting a fiscal update from the government led by Mark Carney. Economists expect the report to show improved government revenues supported in part by higher oil prices, although slower consumer spending and additional public expenditures may continue weighing on broader economic growth.

Canada’s housing slowdown has also remained a key concern for markets, with softer real estate activity affecting household spending despite gains in domestic equity markets.

Meanwhile, oil prices continued climbing amid ongoing geopolitical tensions involving Iran and continued disruptions affecting shipping activity through the Strait of Hormuz. Crude prices approached the $100-per-barrel level during the session, offering some support to commodity-linked assets.

Investors are now focused on upcoming policy announcements from both the Bank of Canada and the Federal Reserve, with markets widely expecting both institutions to leave interest rates unchanged.

Canadian government bond yields also moved higher alongside U.S. Treasury yields as traders adjusted expectations for future monetary policy and inflation risks. Kitco