The Canadian dollar fell to its lowest level in more than six weeks on Wednesday as renewed uncertainty surrounding North American trade talks weighed on investor sentiment. 

Currency markets reacted after U.S. officials announced new negotiations related to the United States–Mexico–Canada Agreement without mentioning Canada’s direct involvement in the early discussions.

At the same time, lower oil prices added further pressure on the loonie. Crude oil, one of Canada’s most important exports, declined sharply following reports of possible progress in negotiations between the United States and Iran. Because the Canadian economy is closely tied to energy markets, movements in oil prices often have a direct impact on the strength of the Canadian dollar.

Analysts also noted that investors are closely watching the next moves from the Bank of Canada. 

Expectations for additional interest rate increases have eased slightly in recent weeks after softer inflation data, although policymakers continue to monitor global energy prices and trade developments that could influence the country’s economic outlook.