USD/CAD hit 1.4190 during early U.S. trade, the session low; the pair subsequently consolidated at 1.4149, retreating 0.97%.
The pair was likely to find support at 1.4115, Monday's low and resistance at 1.4383, the high of January 13.
Oil prices rose back above $30 per barrel on Tuesday, lending support to the commodity-related Canadian dollar, but gains were expected to remain limited as crude continued to be pressured lower by concerns over a global supply glut.
Investors were also focusing on the Federal Reserve's policy meeting, due to begin later in the day.
The Fed is expected to keep interest rate on hold at the conclusion of its two-day policy meeting on Wednesday after raising interest rates for the first time in almost a decade in December.
Investors were looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
The loonie was higher against the euro, with EUR/CAD tumbling 1.17% to 1.5320.