Sisi Chan

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

Rocketing in response to U.S. Federal Reserve Chairman Jerome Powell’s justice department subpoenas, the Canadian dollar has seen a rise following the depreciation of the U.S. dollar.

Powell’s allegations against the Trump administration’s attempts to manipulate U.S. monetary policy and interest rates have drawn significant attention. The global marketplace has expressed concern about this speculated threat to the independence of the world’s most powerful central bank.

Bank of Nova Scotia’s Vice-President, Derek Holt, heads up Capital Markets Economics and has voiced his perspective on Trump’s potential influence on monetary policy.

In a short timespan, the value of the Canadian dollar has experienced fluctuations, as illustrated by a drop to USD 71.90 cents on Jan. 9, only to rise again to 72.10 by 4 p.m. Eastern on Jan. 12.

A complex relationship exists between the Canadian dollar and its U.S counterpart, which has been highlighted amidst the recent shifts.

The impacts of a stronger Canadian dollar, or loonie, against the U.S. dollar could have both favorable and challenging implications for import-export dynamics.

It’s also worth noting how global crude oil prices, denominated in U.S. dollars, affect Canadian gasoline costs.