After nearly falling below 70 cents U.S. in late June, the loonie has rebounded 2.6%<\/p>\n
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The Canadian dollar on Friday pushed past 72 cents U.S., continuing its reversal that started in late June due to a sliding greenback as bets fade for the United States Federal Reserve to hike interest rates.<\/p>\n
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\u201cSpread compression (on interest rates) is a clear motivation for the (Canadian dollar),\u201d Shaun Osborne, currency strategist at Bank of Nova Scotia, said in a note on Friday.<\/p>\n
After nearly falling below 70 cents U.S. in late June, the loonie has rebounded 2.6 per cent as the rate differential between the United States\u2019 and Canada\u2019s two-year bonds has shrunk by 25 basis points since a late July peak, helping to support the Canadian dollar.<\/p>\n
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Those short-term differentials, driven by central bank interest rate outlooks, have narrowed as markets cut back on bets for the U.S. Federal Reserve to hike.<\/p>\n
Bets for a Fed rate hike in September fell to a 30 per cent chance on Friday from about 65 per cent at the start of the month, with poor U.S. economic data driving the change.<\/p>\n
The U.S. Census Bureau on Friday said stateside retail sales fell 0.6 per cent month over month in July, the first decline since May 2025.<\/p>\n