Investing.com - The Canadian dollar dipped against a broadly stronger U.S. dollar on the first full trading day of 2017 on Tuesday, despite a rally in oil prices, as expectations for a faster pace of rate hikes this year underpinned the greenback.
USD/CAD touched intra-day highs of 1.3460 and was last at 1.3444.
Oil prices rallied more than 2% to hit the highest levels since July 2015 amid hopes that an agreement between major producers to cut production will be effective in reducing a global supply glut and rebalancing markets.
Higher prices for oil, one of Canada's major exports, typically boost the Canadian dollar.
The greenback was on track to post its largest gain in over two weeks against a basket of the other major currencies, climbing back towards December’s 14-year peaks.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, advanced 0.97% to 103.36.
The index had declined on Friday as traders took profits in the wake of a late year rally that propelled the greenback to highs of 103.65 on December 20.
The greenback has strengthened broadly on the back of expectations for a faster pace of rate hikes from the Federal Reserve this year and increased fiscal spending under the incoming Trump administration.