07:12 AM EDT, 05/26/2026 (MT Newswires) -- The United States and Iran's announcement that serious discussions are underway to reopen the Strait of Hormuz sent WTI sharply lower to around US$90/barrel on Monday, raising the question if the Canadian dollar (CAD or loonie) -- still widely treated as a petrodollar -- should be under pressure, said National Bank of Canada.

The answer is less straightforward than the oil move alone suggests, noted the bank.

Canada's exchange rate hasn't been trading like a pure crude proxy in recent months, and Monday's price action reinforces that point, stated National Bank.

The rolling correlation between daily moves in the loonie, measured as US dollar (USD) per CAD, and WTI has turned negative in recent months, a clear break from the strongly positive relationship that prevailed during the previous oil shock in 2022, while the correlation with bullion has strengthened sharply and now exceeds even the link with Canada-U.S. two-year yield spreads.

That matters because the currency signal is no longer being transmitted mainly through energy, pointed out the bank. If lower oil reflects a fading geopolitical supply premium rather than a deterioration in global demand, the terms-of-trade shock for Canada will be more limited.

At the same time, gold's rally is doing more of the heavy lifting for CAD, especially when bullion was up roughly US$50/oz on Monday and markets were still pricing geopolitical uncertainty rather than a clean return to normal, added National Bank.

As a consequence, the loonie's resilience isn't a contradiction but a rotation in its commodity anchor. Oil still matters for Canada, but in the current market configuration, gold appears to be the more relevant marginal driver, helping explain why CAD is appreciating even as crude retreats, according to the bank.