The Canadian dollar strengthened against its U.S. counterpart on Wednesday, extending its rebound from a one-month low, as investors weighed prospects of Canada's receiving some relief from U.S. tariffs.

Loonie markets are recovering ground as the Trump administration begins to pivot away from its own tariff policies. Key labor data still looms large at the end of the week with Canadian employment figures and another round of US Nonfarm Payrolls net jobs additions.

A significant impact on Canada's foreign investment inflows could potentially compromise economic growth, creating a bearish outlook for the loonie”

By Fergal Smith TORONTO - The Canadian dollar clawed back some of its recent declines against its U.S. counterpart on Tuesday as the greenback posted broad-based losses and investors doubted that hefty U.

Price action in the Mexican peso and Canadian dollar suggests markets are hopeful U.S. tariffs won't remain in place for long, MUFG Bank's Lee Hardman said in a note. The initial falls in the two currencies look relatively modest given the scale of tariffs,

Canada sends about 75 per cent of its exports to the U.S., including oil, which fell to a two-month low. U.S. crude oil futures were trading 2.8 per cent lower at $68.75 a barrel.

The Canadian dollar weakened to a one-month low against its U.S. counterpart on Tuesday as investors raised bets on further interest rate cuts from the Bank of Canada after the start of a trade war likely to badly hurt Canada's economy.