TORONTO: The Canadian dollar was little changed against its U.S. counterpart on Tuesday, recovering from its weakest level in four weeks earlier in the session as oil prices rose and investors awaited fresh impetus for direction.

The loonie was trading nearly unchanged at 1.2440 to the greenback, or 80.39 U.S. cents, after touching its weakest intraday level since Oct. 12 at 1.2485. The currency has traded in a narrow range around 1.2450 since Friday.

"I think markets are looking for the next catalyst," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets.

"With the move we've seen in oil today and the drift down in global interest rates, personally I think the next substantive move in USD-CAD is lower."

Canadian dollar steadies as jobs gain supports rate hike bets

The price of oil, one of Canada's major exports, settled 2.7% higher at $84.15 a barrel after the United States lifted travel restrictions and other signs of a global post-pandemic recovery boosted the demand outlook.

The U.S. 10-year yield fell to its lowest level in nearly seven weeks despite data showing U.S. producer prices increased solidly in October.

Canadian government bond yields eased across the curve, tracking the move in U.S. Treasuries. The 10-year was down 3.8 basis points at 1.591%, pulling back from a 2-1/2-month high earlier this month at 1.766%.

Analysts say that the Bank of Canada risks cutting short the current economic expansion if it shifts its focus from reducing slack in the economy to tamping down inflation.

BoC Governor Tiff Macklem is due to give closing remarks at a joint conference of the Federal Reserve Board, Bank of England, European Central Bank and Bank of Canada at 5:45 p.m. ET (2245 GMT).