The Canadian dollar traded at its highest level since early November 2007 on Tuesday as nervousness over the failure of American lawmakers to raise the country's debt limit punished the greenback.
The loonie was up 0.51 of a cent to 106.24 cents U.S.
The United States has a week to reach a deal to increase its $14.3-trillion U.S. debt limit or face not being able to pay its bills. That has led to fears the world's largest economy could default on its financial obligations and send shockwaves throughout world markets.
Both President Barack Obama and House Speaker John Boehner made televised pitches Monday night for their points of view.
Obama said a compromise was needed to avoid a "reckless and irresponsible" outcome. Boehner appeared to dig in his heels, saying Obama would not get what he seeks.
The weak U.S. dollar pushed oil prices higher with the September contract on the New York Mercantile Exchange up 46 cents to $99.66 U.S. A weaker greenback usually helps raise oil prices, which are denominated in dollars, as it makes oil less expensive for holders of other currencies.
Copper prices also headed higher with the September contract ahead six cents to $4.47 U.S. a pound.
Gold prices edged slightly away from Monday's latest record close, down 80 cents to $1,611.40 U.S. an ounce.
