Sisi Chan

The loonie is up amid Trump’s Fed probe. Who that will help — and hurt?

As a response to Trump’s probe into the U.S. Federal Reserve, the Canadian Dollar, also known as the Loonie, has appreciated against the U.S. Dollar. Federal Reserve Chair, Jerome Powell, attributes this to suspicions surrounding renovations to Federal Reserve buildings in the summer of 2025, which Powell alleges are being used as a pretext for the Trump administration to gain more control over monetary policy.

Economists warn of potential risks if the independence of the world’s most powerful bank is jeopardized, potentially undermining global stability and productivity. Derek Holt, vice-president and head of Capital Markets Economics at Bank of Nova Scotia, expresses concern about such developments.

The value of the Canadian Dollar against the U.S. Dollar and its relation with other global currencies are depicted through specific currency statistics. The value fluctuations during a particular span are also discussed here.

The impact of a stronger Loonie against the U.S. Dollar is felt by both Canadian consumers and exporters. Global commodity pricing, including crude oil, is expected to be shifted with the weakening of the U.S. Dollar.

Patrick De Haan, head of petroleum analysis at GasBuddy, outlines the potential impact on gas prices, and warns about geopolitical risks that could counterbalance these benefits with a weakening U.S. Dollar.

A stronger Loonie may affect local businesses that aim to import U.S. Dollar-priced goods. Canadian exporters also face potential downsides due to the stronger Loonie.

The influence of a stronger Canadian Dollar on food prices might be beneficial for consumers but, on the flip side, could negatively impact farmers.

Emphasizing the importance of central bank’s insulation from political bias, the discourse takes into account President Trump’s previous dissatisfaction with Jerome Powell’s decisions on interest rates.

Karl Schamotta, chief market strategist at Corpay, and Andrew DiCapua, principal economist at the Canadian Chamber of Commerce, provide insights into the potential perils of the Trump administration’s influence over the Federal Reserve.

The stock market’s reaction after the U.S. Department of Justice’s probe announcement and the concerns surrounding retirement or investment portfolios are explained through a quote from Craig Ellis, chief investment officer of Bellwether Investment Management.