The Canadian dollar has clawed its way back from the brink. After plunging to 14-month lows near 70 US cents earlier in July, the loonie has staged a meaningful recovery, with USD/CAD sinking to levels not seen since early June as of September 8, 2026.
A Fed hold, a jobs miss, and a currency reversal
The pivot point came on July 29, when the Federal Reserve voted 9-3 to keep its benchmark rate unchanged at 3.50% to 3.75%. Three dissenters favored a hike, which tells you the internal debate is real. But the majority held firm, and markets responded by trimming the odds of a September rate increase.
That decision alone nudged USD/CAD down toward 1.40, with the loonie touching a 9-day high around 1.4024, roughly 71.31 US cents.
Then came the jobs report that really moved the needle. US nonfarm payrolls for July showed a decline of 23,000 jobs. Economists had expected a gain of 80,000. That 103,000-job gap between expectation and reality did more for the Canadian dollar than any central bank statement could. USD/CAD dropped to its lowest reading since early June, as traders recalibrated their assumptions about when, or whether, the Fed would actually tighten further.
