OREANDA-NEWS. February 18, 2015. The Canadian dollar on Tuesday hit its strongest closing level against its US counterpart since a surprise January rate cut, helped by crude oil prices breaching a 2015 peak.

The loonie, as Canada's currency is colloquially known, has struggled against the greenback recently on the back of slumping crude coupled with the Bank of Canada rate cut.

The currency again took oil's lead on Tuesday despite housing data that suggested Canada's prolonged property boom may finally be ending, which could prompt more accommodative action from the Bank of Canada.

"There are signs the Canadian housing market is cracking, but at the moment the market is fixated on the oil trade," said Adam Button, a currency analyst at ForexLive in Montreal.

Oil's rise - the US crude benchmark brushed off a slow start to settle above \\$53 a barrel while Brent touched a 2015 high - helped reinvigorate the currency of Canada, a major crude producer, although it may not be enough to support it over the longer term, another strategist said.

"With the degree that the Canadian dollar collapsed, almost, in January, there's some risk that was overshooting ... and we could spend the next few weeks consolidating or even reversing before the trend reasserts itself," said Adam Cole, head of foreign exchange strategy at Royal Bank of Canada.

Investors did not seem to panic as Greece and its eurozone creditors broke off debt talks without a deal.

"Markets are quite risk-tolerant today," Cole said. "It's hard to put a finger on (the reason for) it."

The Canadian dollar ended the session changing hands at C\\$1.2374 to the greenback, or 80.81 US cents, stronger than Friday's official Bank of Canada close of C\\$1.2461, or 80.25 US cents. Trading was limited on Monday due to North American holidays, when the loonie closed at C\\$1.2465, according to Thomson Reuters data.

ForexLive's Button said if US oil breaks through \\$55 a barrel, the loonie could rise to C\\$1.20. But if a strong June rate hike hint is found in the minutes of the US Federal Reserve's last meeting, due to be published on Wednesday, the Canadian currency could weaken to C\\$1.30, he said.

Canadian government bond prices were lower across the maturity curve, with the two-year down 6.5 Canadian cents to yield 0.461 percent and the benchmark 10-year down 75 Canadian cents to yield 1.502 percent.