The weaker greenback and the ongoing conflict in Yemen pushed the price of crude, a key Canadian export, higher, despite Saudi Arabia's announcement of record oil output last month.
At 9:12 a.m. EDT (1312 GMT), the Canadian dollar was at C$1.2049 to the greenback, or 82.99 US cents, stronger than the Bank of Canada's official close of C$1.2110, or 82.58 US cents, on Monday.
The currency's strongest level of the session was C$1.2025 and its weakest level was C$1.2107
US crude prices rose 1.5 percent to $60.12, while Brent crude was up 1.6 percent at $65.98.
The Canadian dollar is expected to trade between C$1.2000 and C$1.2100 against the US dollar on Tuesday, according to National Bank Financial.
Canadian government bond prices were mixed across the maturity curve with longer-term bonds priced lower. The two-year price was down 3 Canadian cents at 0.722 percent and the benchmark 10-year down 37 Canadian cents at 1.861.
The Canada-US two-year bond spread was 11.4 basis points, while the 10-year spread was -42.8 basis points.