The Canadian dollar has eased slightly lower, but continues to trade close to the highest level in 11 days against the US dollar, buoyed by a recent gain in crude oil prices over expectations of production cuts at the OPEC meeting. At the time of writing, USD/CAD is trading around 1.405.

The Loonie had been experiencing significant weakness in recent weeks over the prevailing risk-off sentiment in global markets owing to the coronavirus pandemic, even as crude oil prices crashed after Saudi Arabia announced a price war with Russia, adding to more worries among traders.

The Canadian dollar’s value is closely correlated with crude oil prices as oil is one of the key exports that supports the Canadian economy. In the previous session, optimism surrounding possibility of deeper production cuts by leading oil producers helped caused USD/CAD to fall to 1.3945, the lowest level seen since March 27.

Meanwhile, just like the rest of the world, Canada’s economy continues to reel under the effects of the pandemic. Purchasing activity in Canada experienced a higher than forecast contraction during March, despite which the Canadian dollar made gains in the last session.