Canadian dollar hits lowest level after seven-week high

The Canadian dollar has been recorded as the weakest against US this week.

It recorded lowest on tuesday,a day after a ‌major energy sector acquisition that could have given the loonie a boost and ahead of a fiscal update from Canadian Prime Minister Mark Carney's government.

The loonie was trading 0.4% lower at 1.3680 per U.S. dollar, or 73.10 U.S. cents, after moving in a range of 1.3614 to 1.3691.

On Monday, the currency touched a near seven-week high at 1.3595.

"M&A news may have given the CAD a tailwind yesterday, less so today as the CAD slips lower in line with its major currency peers," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note.

British firm Shell said on Monday it has agreed to buy Canadian energy company ARC Resources in a $16.4 billion deal.

"The deal represents a significant endorsement of the Canadian energy sector as an investment destination amid the Carney government’s pro-growth pivot on the sector," the Scotiabank strategists said.

Canada's fiscal update, expected after 4 p.m. ET (2000 GMT), is likely to show that the budget deficit improved and revenues ‌rose in the last fiscal year but gains from higher oil prices were largely offset by weak consumer spending and new spending measures, economists said.

Canada's housing market slump, the longest in recent decades, is straining household spending even as a record high domestic stock market generates hundreds of billions of dollars of increased wealth.

On the contrary, the U.S. dollar strengthened against a basket of major currencies as markets focused on central bank policy decisions.

While the Federal Reserve and the Bank of Canada are expected to keep interest rates on hold on Wednesday.

The price of oil, one of Canada's major exports, rose 3.4% to $99.61 a barrel as stalled efforts to end the Iran war kept the Strait of Hormuz largely closed

The United Arab Emirates said it would leave OPEC and OPEC+, easing some supply concerns.

Additionally, the Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 2.7 basis points at 3.530% after earlier touching its highest level since April 7 at 3.546%.