Loonie falters to a week low as oil prices suffer

The Canadian dollar dropped against its American partner on Wednesday after oil prices took a hit, which cut demand for the loonie as they go hand in hand. 

USD/CAD last traded at 1.3937, with a week high hit during the session at 1.3999, and a session-low at 1.3820. The pair opened at 1.3884. 

Loonie faltered against its southern rival today as crude oil prices tumbled to a three-month low at $27.40 a barrel, which heaped more pressure on the currency. 

Loonie is closely aligned with oil prices as a big chunk of Canada's economy depends on oil exports. 

On the other hand, the greenback got a boost today after Fed chief Janet Yellen's testimony ahead of Congress, and although most of the dollar's gains were erased against most of its rivals, it held on to them against the loonie. 

The dollar index, which measures the U.S. unit against a basket of rivals, last traded at 96.09, up from the opening level of 96.05, with an intraday high at 96.73, and a low at 95.84. The index hit a four-month low yesterday at 95.84.