07:33 AM EDT, 08/13/2026 (MT Newswires) -- The Canadian dollar's medium-term recovery will likely depend less on oil prices and more on whether the broader economic recovery can be sustained, according to Commerzbank Research in a Thursday note.

Recent data suggested the recovery was already underway before the US-Iran conflict and wasn't mainly driven by higher energy prices, said Commerzbank.

Real energy exports have been rising steadily since last summer. At the same time, the labor-market recovery has been driven mainly by services rather than the relatively small energy sector, added the bank. Stronger PMIs, exports and overall growth also suggest that US tariff uncertainty is easing.

Oil prices remain an important short-term driver of the Canadian dollar, but US-Canada trade talks will matter more for the currency's medium-term outlook, according to Commerzbank.

"It is only once the Canadian real economy has recovered sustainably that the Bank of Canada is likely to consider interest rate hikes, and it is only then that the CAD is likely to recover," wrote Commerzbank FX Analyst Michael Pfister in the note.