TORONTO: The Canadian dollar beat a slight retreat against its US counterpart on Tuesday despite getting support from oil prices that held steady just below 2015 highs due to tensions in Yemen.
The price of crude, one of Canada's biggest exports, has risen about 15 percent this month on concerns that the civil war in Yemen, Saudi Arabia's southern neighbor, could destabilize the Middle East and reduce oil supplies.
The loonie was range-bound but stuck close to highs not seen since January, helped by recent domestic economic data that has been stronger than forecast and by a more upbeat tone from the Bank of Canada.
At 9:19 a.m. EDT (1319 GMT), the Canadian dollar was at C$1.2249 to the greenback, or 81.64 US cents, a slight dip from the Bank of Canada's official close of C$1.2230, or 81.77 US cents, on Monday.
The currency's strongest level of the session was C$1.2215 Its weakest level was C$1.2281.
Canada will release its 2015/16 budget after markets close on Tuesday. The governing Conservatives' vow to balance the budget for this fiscal year.
The value of Canadian wholesale trade unexpectedly fell by 0.4 percent in February to C$53.62 billion. Analysts had expected no change following January's 2.9 percent plunge.
US crude prices were up 0.21 percent at $56.50, while Brent crude lost 0.33 percent to $63.24.
The Canadian dollar, which was weaker against many of its currency counterparts, is expected to trade between C$1.2180 and C$1.2300 against the US dollar on Tuesday, according to RBC Capital Markets.
Canadian government bond prices were mostly lower across the maturity curve, with the two-year price down 1 Canadian cent to yield 0.646 percent and the benchmark 10-year falling 10 Canadian cents to yield 1.434 percent.
The Canada-US two-year bond spread was 11.0 basis points, while the 10-year spread was -45.6.
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