Loonie rises amid Trump's Fed probe

The Canadian dollar strengthened slightly after a U.S. DOJ probe tied to testimony about Federal Reserve office renovations, and Fed Chair Jerome Powell said the allegations relate to that testimony and may reflect an effort to influence monetary policy.

A U.S. Department of Justice probe tied to testimony about renovations to some Federal Reserve office buildings has coincided with a modest rise in the Canadian dollar. Fed Chair Jerome Powell said the allegations relate to that testimony and suggested they may be a pretext for political influence over monetary policy. Between Jan. 9 and Jan. 12 the loonie moved from about US$0.719 to roughly US$0.721, and markets showed an initial reaction before partial recovery. Known details: - The DOJ's allegations were reported as connected to testimony given in the summer of 2025 about Federal Reserve office renovations. - Fed Chair Jerome Powell publicly characterized the allegations as related to that testimony and voiced concern about possible political influence on monetary policy. - The Canadian dollar strengthened slightly in the period cited, and stock markets initially fell on the news before recovering later in the day. Summary: A stronger Canadian dollar can lower the cost of some imports and gasoline for Canadian consumers while creating competitive headwinds for exporters and some farmers. Undetermined at this time.