The Canadian dollar, which closed at 83.18 U.S. cents on Friday in advance of the Victoria Day holiday weekend, plunged 1.43 U.S. cents to 81.75 cents.
The fall in the loonie came as the June contract for benchmark oil fell $2.17 to US$57.26 a barrel.
Oil has recovered somewhat in recent weeks after plunging below US$50 from highs of about US$107 last summer, but has been unable to gain traction above US$60 a barrel amid a continued glut in world supply.
Meanwhile, June gold gave back $20.90 to US$$1,206.70 an ounce, while July copper was down seven cents at US$2.84 a pound.
On equity markets, the Toronto Stock Exchange edged up 12.90 points to 15,121.02.
New York markets were mixed with indexes moving in a narrow range amid optimism over the latest read on U.S. housing construction but disappointing earnings news from Wal-Mart Stores Inc., the world's largest retailer.
The Dow Jones industrial average moved further into record territory, rising a slight 13.51 points to 18,312.39 after a record high close of 18,298.88 on Monday.
The S&P 500, which also set a record high of 2,129.20 on Monday, gave back 1.37 points to 2,127.83, while the Nasdaq fell 8.41 points to 5,070.03.
Norman Raschkowan, senior partner at Sage Road Advisors, pointed out that with strength in the U.S. dollar it was natural to expect some weakness in commodities, which are priced in the American currency. A higher U.S. dollar tends to depress commodity prices since it makes them more expensive for holders of other currencies.
"Copper and iron ore are both weak and so you've seen the natural resource sectors struggling today," Raschkowan said.
He also said that both oil and gold have experienced a bit of a rally in the last couple of weeks.
"So part of it is ... perhaps just a reaction to the strength in the U.S. dollar and some of it is just people taking some profits after what's been a very strong few weeks," he said.
In economic news, the U.S. Commerce Department said Tuesday that American housing starts rose 20.2 per cent in April to an annual rate of 1.14 million homes, the most since November 2007.
In corporate earnings, Wal-Mart (NYSE:WMT) reported a seven per cent drop in first-quarter profit as the growth in sales at its U.S. stores slowed 1.1 per cent, with both figures missing analyst expectations. It shares were down $3.49 or 4.37 per cent at US$76.43.
In Canada, online gaming fire Amaya Inc. (TSX:AYA) confirmed it was partnering with GVC Holdings PLC in a bid to buy the global online gaming company that operates Partypoker. Its shares were up 30 cents or 0.93 per cent at $32.62.