The Canadian dollar rose against its American counterpart on Tuesday, but the gains were limited after the release of disappointing domestic data, and as investors await the deadline set by American President Donald Trump for Iran to end its blockade on Gulf oil.

The Canadian currency was trading at a rise of 0.1% at 1.3900 against the American dollar, or 71.94 American cents, after it moved within a range of 1.3892 to 1.3929. The currency touched last week its lowest level in about four months at 1.3966.

Global markets entered a period of high uncertainty before the 8 PM Washington time (00:00 GMT) deadline set by Trump, as investors weigh potential scenarios from a ceasefire to a new military escalation and their effects on oil, currencies, and high-risk assets.

Aaron Hurd, portfolio manager in the currency group at State Street Global Advisors, said: "The Canadian dollar benefits from the rise in energy prices, but the United States does as well, and I believe the United States is more capable of adapting to the shock compared to Canada. We have witnessed the weakness of the Canadian dollar against the American dollar during the past few weeks, and I believe we will reverse part of that quickly if an agreement is reached. As for if there is no agreement and the situation escalates things will remain approximately as they are."

The price of oil, which is one of the main exports for Canada, rose by 0.5% to reach $112.95 per barrel. Investors globally worry that the rise in energy prices may increase inflation and negatively affect economic growth.

Canadian economic activity declined in March for the first time in four months, while indices of price pressures rose, according to the Ivey Purchasing Managers Index data, as the seasonally adjusted index dropped to 49.7 last month compared to 56.6 in February.

It is expected that the Canadian jobs report for March, scheduled for release on Friday, will provide additional indicators about the state of the domestic economy, as economists expect the addition of 15,000 jobs after the economy lost 84,000 jobs in February.

Canadian bond yields also moved upward across the yield curve, with the yield on 10-year bonds rising by 4.6 basis points to reach 3.515%.