Features
The real story behind Sammy Davis Jr.’s conversion to Judaism
Jewish comedians made racist jokes about him. Some Black audiences booed him. But his faith was genuine
By Beth Harpaz February 23, 2023
(This story was originally published in the Forward. Click here to get the Forward’s free email newsletters delivered to your inbox.)
Sammy Davis Jr. was a short and skinny Black man with one eye. His wife was white, his mother was Puerto Rican and he was a convert to Judaism. In the crass and racist world of mid-20th century comedy, he was a walking punchline, even in his own routines.
“When I move into a neighborhood, I wipe it out,” was his standard self-deprecating gag. The line received knowing laughs in the 1950s and ’60s when many towns forbade property sales to Blacks and Jews, and whites often fled when Black families moved into their neighborhoods.
Jokes by his fellow entertainers were crude. In a live skit at the Sands in Las Vegas in 1963, Dean Martin physically lifted Davis up (he weighed a mere 120 pounds) and said, “I’d like to thank the NAACP for this wonderful trophy.” At a Friars Club roast, comedian Pat Buttram said that if Davis showed up in Buttram’s home state of Alabama, folks “wouldn’t know what to burn on the lawn.”
Jewish comedians got their licks in, too. Milton Berle cross-dressed as Davis’ white wife, May Britt, and sang, to the tune of “My Yiddishe Mama,” “My Yiddish Mau-Mau,” a reference to an anti-British rebellion in Kenya.
At another roast, Joey Bishop said he’d “never been so embarrassed” in his life as when he met Davis in synagogue. When the rabbi came in, Bishop said, “Sammy jumped up and hollered, ‘Here come the judge!’”
This cringeworthy line was delivered by Davis himself in a show at the Copa: “I don’t know whether to be shiftless and lazy, or smart and stingy.”
Some of these jokes implied that it was preposterous for a Black man to convert to Judaism. But for Sammy Davis Jr., being Jewish “was the most logical thing in the world,” historian Rebecca L. Davis told me. “Over and over again, he made this analogy between being Jewish and African American. He was very admiring of the Jewish millennia-long struggle against oppressors and overcoming all kinds of obstacles.” He saw himself as “an outsider and very marginalized, and he could see in the Jewish experience a similarity that really drew him in emotionally.”
Davis, a history professor at the University of Delaware (and no relation to Sammy), has done extensive research on the entertainer’s conversion, his career and how he was perceived. Her article, “‘These Are a Swinging Bunch of People’: Sammy Davis, Jr., Religious Conversion, and the Color of Jewish Ethnicity,” appeared in the American Jewish History journal in 2016, and she included a chapter about him in her 2021 book, Public Confessions: The Religious Conversions That Changed American Politics. Her take is that Davis was not only one of the most successful entertainers of the 20th century despite the many racist barriers in his way, but that his Jewish faith was utterly genuine.
The fateful accident
Davis lost his eye when he crashed his car driving home to California from Las Vegas in November 1954. One of several stories about what sparked Davis’ path to conversion originates with the aftermath of the accident. He wrote in his 1965 autobiography, Yes I Can, that his friends Tony Curtis, who was Jewish, and Janet Leigh, who was not, arrived at the hospital and Leigh gave him a religious medal with St. Christopher on one side and a Star of David on the other. “Hold tight and pray and everything will be all right,” Leigh told him.
Davis later told Alex Haley in a Playboy interview that he gripped the object so tightly that the Star of David left a scar on his hand, “like a stigmata.” He took it as a sign that he should convert.
Davis also felt that he owed his career to a Jewish man, Eddie Cantor, who ironically had been one of vaudeville’s best-known blackface performers; Cantor’s act earned him a spot with the Ziegfeld Follies. Decades later, Cantor gave Davis his first big break, a solo televised appearance on the Colgate Comedy Hour in 1952, and became a father figure to him. “He saw Cantor’s Jewishness as part of what made Cantor a good person,” said Rebecca Davis.
In another version of how his car accident led to his conversion, Sammy Davis said that a mezuzah Cantor gave him had mistakenly been left behind in a hotel room the day of the crash. That story transformed the mezuzah “into a talisman,” Rebecca Davis observed, another signpost on the road to his conversion.
Identifying as a Jew
In his memoir, Sammy Davis recalled Rabbi Max Nussbaum, of Temple Israel in Hollywood, telling him, “We cherish converts, but we neither seek nor rush them.” But he began to publicly identify as Jewish before formally converting. In 1959 he refused to film scenes for the movie Porgy and Bess on Yom Kippur, while Ebony ran a photo of him holding Everyman’s Talmud.
He also repeatedly compared the oppression of Jews to that of African Americans. In his 1989 book, Why Me?, he wrote that he was “attracted by the affinity between the Jew and the Negro. The Jews had been oppressed for three thousand years instead of three hundred but the rest was very much the same.” When he visited the Wailing Wall in 1969, he said Israel was his “religious home.”
The reception from Black audiences
American Jews by and large loved him, and his reception in the Jewish press, including the Forward, was also positive, Rebecca Davis said. But it was more complicated for Black media. On the one hand, she said, he was “this exemplar of Black success, very wealthy, very famous, very successful” in an era of rampant racism.
On the other hand, there was “confusion and anger” about why — as a prominent Black activist who joined marches, raised money and was the United Negro College Fund’s largest donor — Sammy Davis so often connected the civil rights cause to Judaism. While there were a “disproportionate number of Jews who were passionate about civil rights and were willing to put their personal safety on the line to stand up for civil rights,” at the same time, Jews were part of a “broader American culture that saw African Americans as inferiors. That was the prevailing cultural norm among white people in the 1950s,” Rebecca Davis said. Other critics felt that he had converted to ingratiate himself with whites as a way to get ahead.
And when he “let himself be the joke” as part of the Rat Pack — a loose ensemble of performers that included Dean Martin, Frank Sinatra and Peter Lawford — that “really angered a lot of African Americans who saw him more as performing for white audiences than for Black audiences.”
He formally converted with Britt shortly before their wedding in 1960. She was as serious about it as he was, making sure, even after they were divorced, that their children went to Hebrew school and that their son was bar mitzvahed.
Disinvited from JFK’s inauguration
But their marriage also resulted in one of the most painful episodes of his life, when he was disinvited from John F. Kennedy’s presidential inauguration. The Democratic coalition that elected JFK included Southern white Democrats, and they did not want a Black man married to a white woman performing at the celebration. “They forced Davis out,” Rebecca Davis said. “He was so stung by that. Here he was on stage and on film with Dean Martin and Frank Sinatra and the biggest stars of the day, and they all got to go to the inauguration, but he didn’t.”
That rejection helps explain Davis’ subsequent embrace of Richard Nixon. “Nixon, who was politically very devious, figured he could use Sammy Davis as a token African American supporter by overdoing it and inviting him to sleep in the Lincoln bedroom,” Rebecca Davis said. That made him the first Black man to spend the night as a guest in the White House.
Some African Americans saw Davis’ alignment with Nixon and the Republicans as a betrayal. Harry Belafonte and Sidney Poitier stopped returning his phone calls, Rebecca Davis wrote, and a year or two after he performed at the 1972 Republican National Convention, he was booed at an event organized by Jesse Jackson.
He responded to the boos by saying, “I get it. I understand. But I need you to know, I always did it my way. It’s the only way I’ve got,” Rebecca Davis said. “Then he sang ‘I’ve Gotta Be Me,’ and they gave him a standing ovation.”
A steadfast Jew until the end
His third wife, Altovise, was a churchgoer, but Sammy Davis remained a steadfast Jew until the day he died. Everything he said about Judaism “was said with the utmost sincerity,” Rebecca Davis said. “He never once looked back and said, ‘Oh, that was just a phase I was going through.’ And he never talked about it in terms of his career. He only talked about it as something that spoke to him on a deep level.”
Davis died of throat cancer in 1990 at age 64. Sinatra, Berle, Liza Minnelli, Stevie Wonder, Dionne Warwick and many other celebrities were among thousands of mourners who backed up traffic for 8 miles en route to the funeral at Forest Lawn Memorial Park in LA. Rabbi Allen Freehling presided at the service, but the eulogy was given by Jesse Jackson.
“To love Sammy was to love Black and white, Black and Jew,” he said, “and to embrace the human family.”
The service also included one last standing ovation for Davis, when they played a recording of – what else? – “I’ve Gotta Be Me.”
Beth Harpaz is a reporter for the Forward. She previously worked for The Associated Press, first covering breaking news and politics, then as AP Travel editor. Email: harpaz@forward.com.
This article was originally published on the Forward
Features
Today’s “Anti-Zionist” Propaganda was Nurtured in the Soviet Union
By HENRY SREBRNIK For centuries, Jews have been portrayed, by both religious and secular movements, as obstacles to universal order. Christian theology turned Judaism into the emblem of stubborn particularity. Modern ideologies secularized the script, making Jews stand for capitalism, communism, cosmopolitanism, or cultural decay. In the twentieth century, this logic reached its most lethal form in the fantasy of human renewal through the erasure of Jews, culminating in the Holocaust.
The twenty-first-century iteration recycles the same template in overlapping ways. Islamist movements merge “Jew,” “Zionist,” and “Israeli” into a demonic category whose elimination is a sacred duty. Parts of the Western left have reduced Israel to the very symbol of colonial domination.
What North American Jews are experiencing today, as the ideology of anti-Zionism spreads in left-of-centre spaces, looks eerily familiar to anyone who came of age in the 1970s Soviet Union. Just like antisemites battle against a fantasy of “the Jews” that exists in their own heads, the new anti-Zionists battle a “Zionism” that is conjured up by their own fevered imaginations.
Following the June 1967 war, with Israel’s victory over its Arab neighbours, who were intent on destroying the small Jewish state, anti-Zionism became a central tenet of Soviet propaganda, where “Zionism” was usually equated with self-conscious expressions of Jewishness. It was then that the antisemitic notion of Israel as an heir to Nazism and Fascism was popularized in the Soviet media.
It depicted Israel as the outpost of colonial oppression, Jews as betrayers of socialist internationalism. Soviet propagandists distorted the history of Zionism to underscore its supposedly inherent evil nature, ripping its founders and theorists out of historical context and, absurdly, presenting Zionists as the Jewish people’s greatest enemy. These “rootless cosmopolitans” were accused of corrupting socialism from within. By redefining Jews as racists, Zionism as colonialism, the Soviets handed progressives a vocabulary of virtue through which to disguise an old hatred.
In political cartoons and Soviet propaganda art, swastikas were routinely intertwined with Stars of David, and the Israeli military portrayed as resembling Nazi — and specifically SS — troops. If there is a Soviet propaganda subtext that highlights its ideological and propagandistic roots, it would be “Fascism Under a Blue Star,” the 1971 book by Evgeny Evseev, who had served as an Arabic interpreter for both Soviet leaders Nikita Khrushchev and Leonid Brezhnev. By the late 1970s, he had became one of the principal brains of the ultranationalist antisemitic movement in the USSR, know as the “Russian Party.”
Evseev’s book carried a subtitle redolent of Marxist clichés: “Truth about contemporary Zionism: Its ideology, practice, and the organizational system of major Jewish bourgeoisie.” On the illustration printed next to the title page, there was a black spider with both a swastika and a Star of David on top of its body; the spider’s web was spread over the West, from the United States to Britain, France and Italy.
Perhaps the vilest of all these tracts was “Caution: Zionism! Essays on the Ideology, Organisation and Practice of Zionism,” a 1970 attack by Yuri Ivanov. (By the way, it was republished by a left-wing group, The November 8th Publishing House, in Toronto in 2024.) The book’s singular achievement was to fit classic antisemitic conspiracy theory into the only philosophical framework permitted in the USSR — the Marxist-Leninist one — and rewrite it as anti-Zionist critique.
“Ivanov managed to supply a strong theoretical foundation for openly criticizing Zionism with the help of Marx’s and Lenin’s works, which no one could argue against,” Vladimir Bolshakov, another prominent “Zionologist,” recalled in his memoirs. I remember coming across it in the late 1970s while writing my PhD dissertation on Jews and Communists, and was shocked by its vituperative language and tone, not to mention falsehoods, worthy of the worst Nazi propaganda.
All of this bore terrible political fruit. On November 10, 1975, the United Nations passed General Assembly Resolution 3379, equating Zionism with racism. It remains the foundation stone of antisemitic anti-Zionism. It cast Israel, the collective Jew, as committing today’s ultimate crime. Despite being mass-murdered by Nazi racists, Jews became racists. And despite enduring history’s largest genocide, Jews are now accused of “genocide.”
Communist propagandists enjoyed manipulating words to trigger “Pavlovian” responses, the Princeton Kremlinologist Robert Tucker observed; their “ultimate weapon of political control would be the dictionary.”
Much has been written of late about the deep Soviet roots of today’s virulent anti-Zionism in the West. Some thirty-five years after the fall of the Soviet empire, the Soviet corpse continues to emit its infectious gases and poisons people’s minds and imaginations. After 7 October, parts of the Western Left responded not with horror but with slogans lifted from Soviet propaganda: Israel as colonial, Zionism as apartheid, Jews as global oppressors.
Today’s anti-Zionism is not actually concerned with the relationship Jews have with Israel. It is a project centered on producing villains. In this, it follows its predecessors: antisemitism and anti-Judaism. Antisemites were never concerned with the authenticity of Jewish identity, practice, or behaviour; they sought to construct “the Jew” as a monster.
Anti-Zionism repeats this mechanism, simply substituting “the Zionist” for “the Jew,” while inheriting the same foundational hatred. Failing to recognize that anti-Zionism, whose Soviet and Nazi genealogy reveals that it has nothing to do with Jews and their right to self-determination, is fundamentally a project of constructing fiends.
Antisemitism functions not merely as a prejudice but as a moral language, a grammar that shapes how societies explain disorder and assign blame. It provides simplicity where reality is complex and coherence where the world feels incoherent. For such people, it becomes a battle against a uniquely devious and implacable foe – something that cannot be resolved by elections or arguments, but only by confrontation. The logic points beyond persuasion to elimination.
The only way to be anti-Zionist without being an antisemite is to reject the legitimacy of all nation-states equally. The loudest supporters of Palestinian statehood are not doing that. No one should mistake it, or be taken in by those espousing it, for what it is. We should call it, along with antisemitism and anti-Judaism, as “Jew-hatred.” It is nothing more – or less.
Henry Srebrnik is a professor of political science at the University of Prince Edward Island.
Features
“Kaplan’s Plot” – newly released novel set in Chicago is both historical fiction and psychological drama
Reviewed by BERNIE BELLAN I had been searching for a new book this summer that would be of particular interest to Jewish Post readers when I came across the title of a new book that had yet to be released, called “Kaplan’s Plot.” It had received quite a bit of buzz on a number of websites that spotlight books that have – at least in part – a Jewish theme, although it still had not been reviewed when I first read about it.
The plot of the book, as it was described in those initial previews, certainly appealed to me, as it was said to combine a story about a Jewish gangster in Chicago in the early part of the 20th century with a modern day story about a man whose life had come completely unravelled and who was forced to return to Chicago to live with his dying mother.
I’ve been a fan of Jewish gangster stories for years, especially ones written by our own Allan Levine – and I’d often published stories about real life Jewish gangsters – or Jewish gangster fighters – as the case may be, in the pages of The Jewish Post & News (also on jewishpostandnews.ca).
Last year, for instance, I wrote a review of a book called “The Incorruptibles,” about efforts by law-abiding Jews in New York City in the early part of the 20th century to fight corruption. You can read my review here: “The Incorruptibles.”
Also, in the past I’ve run stories about Jewish underworld figures who either lived in Winnipeg or had a strong Winnipeg connection. One of the most popular stories ever to appear on our website, for instance (and which is still being widely viewed), is one that was written by Bill Redekopp – a former writer for the Free Press, who had profiled a fascinating Winnipeg bootlegger by the name of Bill Wolchock in his book, “Crimes of the Century – Manitoba’s Most Notorious True Crimes.” You can read Redekopp’s story about Wolchock at “Bill Wolchock.”
Another story that garnered quite a bit of attention when it was first published was Martin Zeilig’s story about Winnipeg-born Al Smiley, which appeared in the March 29, 2017 issue of The Jewish Post & News. The most interesting tidibt in Martin’s story was that Smiley was was sitting beside the notorious Benjamin “Bugsy” Siegel when Siegel was murdered in 1947. That story doesn’t appear as a stand-alone story on our website, but you can find it by downloading the entire March 29, 2017 issue by entering a search through our “Search archive” link for Al Smiley.
One more story that dealt with Manitoba Jewish gangsters (and which also referenced the Bill Wolchock story) was one I wrote in 2023 titled “A deep dive into the lives of some shadier members of our community.” In that story I wrote about a book that was about to be published titled “Jukebox Empire: The Mob and the Dark Side of the American Dream.” It was the story of Wolf Rabin (born William “Wolfe” Rabinovitch), written by his nephew, David Rabinovitch.
All this serves as a very long winded preamble to a review of “Kaplan’s Plot.” I was somewhat disappointed to learn that the characters in the book are all fictitious, since the mobsters are so vividly drawn – although there are very brief references to real-life mobsters, including Al Capone, Meyer Lansky and Charles “Lucky” Luciano, that make you wonder whether some of the other mobsters might also have been real people.
According to information available about the author, Jason Diamond, this is his very first novel – a very impressive debut. He certainly brings to life a very nasty Chicago in the early part of the 20th century.
What makes what Diamond has written an even more admirable achievement is that the plot works both as a riveting mystery and as a thoughtful examination of a mother and son relationship.
The story alternates between a story set in modern day Chicago (in 2023) and another story that begins in Odesa in Ukraine in 1909, but soon moves to Chicago shortly thereafter.
At first, we read about a character by the name of Elijah Mendes, who has just returned to Chicago from the Bay area, where a business venture in which he was involved has collapsed. Elijah’s mother, Eve, is dying from cancer, but she certainly retains enough strength to carry on with quite a few activities – enabled by her constant puffing on a vape pen. Eve, it turns out, has been a very accomplished poetess during her life and, although she and her late husband Peter were financially quite comfortable, she scoffs at what she regards as Elijah’s obsession with material pursuits.
Eve doesn’t pay much attention to mundane day to day matters, including opening the mail, but when Elijah discovers a series of letters from something called the Hebrew Benevolent Society, his curiosity is piqued and he sets out do discover what those letters are all about.
The chapters alternate between modern and older Chicago, as we are introduced to the Kaplan brothers – Yitzhak and Solomon or, as they come to be known in America – Itz and Sol. The brothers have narrowly escaped a pogrom in Odesa when their parents were able to secure passage for them on a boat destined for Hamburg. Eventually they find themselves on a ship sailing to America, where they make the acquaintance of a character by the name of Hershey.
Hershey tells the boys that he can help them find a place to live in Chicago, where he introduces them to Avi who, it turns out, is a major figure in the Jewish underworld there.
Diamond provides a rich description of what life was like in Chicago back in the day when the city was divided among different ethnic groups who held sway over their own respective territories and when it was dangerous to cross over into the wrong part of town.
As the story develops, we learn that Elijah is actually the grandson of Itz Kaplan, but knows nothing about his grandfather’s very shady past – beyond having been told that he was a “businessman.” When he goes to the building housing the Hebrew Benevolent Society, however, he finds out that there is an entirely new aspect to his family’s past – which leads to his wanting to probe deeply into his family’s history.
Elijah’s own demons – including past drug addiction, a failed marriage, and a deep insecurity about his own ability to succeed in business, come to the fore, but his mother’s refusal to discuss her family’s history haunts him even further.
As the book moves in parallel tracks between two time periods we find out more about Itz Kaplan – and just how malevolent a character he was. And, at the same time as Elijah learns more about Itz, he begins to better understand why his relationship with his mother had gone off the rails.
The mystery of what happened to Itz’s brother, Sol, about whom Elijah had not even known had existed, figures into both stories – the one set in early 20th century Chicago, and the one set in modern Chicago, as Elijah tries to get his mother to open up about her family.
Jason Diamond provides wonderful descriptions of some of the minutiae of Jewish life back in the day when keeping kosher was an essential element of Jewish life. Sol, for instance, is a butcher (something that his father was as well back in Odesa) and maintains a rigid observance of all Jewish laws. He is fastidious about adhering to the quite complex details of butchering meat according to the laws of kashrut, for instance.
Itz, in contrast, who has been deeply emotionally scarred by what he saw happen during the pogrom in Odesa, is totally indifferent to Jewish laws. At the same time though, the reader might develop a grudging admiration for just how cleverly Itz is able to navigate the jungle of the Chicago underworld. That’s why I began this review by referring to other Jewish crime figures – all of whom existed. While we might be repelled by their behaviour, we are often fascinated by the cleverness they exhibited in maneuvering through the almost constant danger that manifested their lives. And – it was knowing that they were living on a knife’s edge that often seemed to motivate them as they stared danger in the face.
Ultimately, Diamond brings it all home. The mystery behind Eve’s family is solved and there is some closure to the relationship between Elijah and Eve.
A truly absorbing story – although just released in September, “Kaplan’s Plot” has already garnered many positive reviews. One review on Goodreads, I note however, says that the reviewer is sick of “mob stories.” I suppose it’s quite evident that I’m a big fan of mob stories that have a Jewish element and, if you are a fan of that genre then “Kaplan’s Plot” is sure to capture your fancy. I’m not sure I’d recommend it as a Chanukah gift for the grandchildren, however – unless one of your grandchildren has aspirations of becoming a mobster.
“Kaplan’s Plot”
by Jason Diamond
Flatiron Books
320 pages
Published September, 2025
Features
CAD Performance in 2025: Key Factors Behind Its Recovery
The CAD is clawing back lost ground. Discover what pushed the loonie down in 2024, what’s lifting it in 2025, and why its future still hangs in the balance.
2024 was a strange year for the loonie. If you are an active currency trader, a quick look at a CAD/USD price chart would have you nodding in agreement. Yes, the year started off strong, but as the months rolled by, it was obvious that something was wrong, especially as we neared the end of Q3. The reason for the downtrend was clear. Most people agreed that it was the tariff threats from Washington, rate cuts at home, and a volatile global economy that were being reflected in the currency markets. And for a while, the CAD was stuck in that losing streak, with some experts even suggesting that there was still more to come.
As the new year rolled around, it didn’t seem like anything had changed. But by mid-2025, quiet shifts had turned into a noticeable recovery, with the loonie gaining back significant ground against the greenback. So, in this piece, we’ll break down what really dragged the Canadian dollar lower in 2024, what’s fueling its recovery this year, and whether this rebound is going to hold steady.
Understanding What Happened in 2024
At the start of the year (2024), one U.S. dollar traded for about 1.35 CAD, which translates to one Canadian dollar being valued at roughly 74 cents U.S. It wasn’t anything special at the time, especially after the levels of inflation and volatility of 2023. Still, economists noted that these were the few key factors that kept the loonie afloat early in the year:
- The price of oil made a comeback. Crude prices firmed up early in the year, supporting Canada’s export earnings and adding a tailwind to the currency.
- Employment figures were solid. Job growth held up, and steady wage gains helped offset the pressure of higher borrowing costs.
- The BoC held a steady interest rate. After an aggressive round of rate hikes in 2023, policymakers looked ready to pause and let the economy cool gradually.
All of these factors were thought to have helped build confidence in the Canadian economy and by mid-2024, the loonie had edged up toward 76-77 cents U.S.
Late-Year Turbulence
Not a lot of people saw it, but as Q2 2024 unfolded, the CAD started to look unattractive to currency market investors. How? Well, it started when the Bank of Canada (BoC) started to signal its intention to cut interest rates. It gave its clearest sign to this on April 10, 2024 when the bank highlighted that inflation was slowing down and it was leaving the door open for rate cuts. This announcement changed market expectations almost overnight.
Eventually, the first cut came on June 5, 2024. The BoC lowered its benchmark rate by 25 basis points from 5% to 4.75%, becoming the first major G7 central bank to start easing.
From there, the pace picked up with rates being reduced four more times. The market’s reactions to these cuts were immediate. And any currency trader with a reliable forex trading app saw each one unfold live. The CAD began to lose altitude as the yield gap with the U.S. widened. With lower returns on Canadian assets, investors favored the greenback. Adding to the pressure, the Trump campaign’s 25% tariff threat in September ignited the fears of a trade war. Which led to traders quickly pricing in potential hits to exports and investment, sending sentiment lower.
The 2025 Comeback
The CAD started 2025 trading at around 67 cents U.S., with some days even seeing it flirt with the 66-cent mark. So, it was a common assumption in the currency traders’ community that 2024 might repeat itself. But something was different this time. Every day, the loonie was quietly clawing back much of the ground it lost during the previous year’s slump.
So, what was different this time? Well, experts believe the panic that gripped both retail and institutional traders through late 2024 began to fade. As positive economic data started to filter in, confidence slowly returned alongside a few key drivers. By midyear, analysts were already talking about a turnaround rather than just a recovery attempt. The CAD was trading in the 72-73-cent U.S. range, up solidly from its January lows, and here’s its current rate.
Major Factors Behind the CAD’s Recovery
So, what helped the CAD? Well, there were a few clear factors that came together to turn sentiment around and put the loonie back on steadier footing.
- U.S. Dollar Weakness
A softer U.S. dollar was one of the clearest tailwinds for the CAD in 2025. The weakening of the USD started occurring when investors started to pull back from U.S. assets as political tension, fiscal worries, and softer economic data piled up.
What drove it?
- Trade and political uncertainty: Tariff moves and Washington infighting rattled investor confidence.
- Fiscal strain: Deficit concerns eroded trust in U.S. financial stability.
- Fed policy shifts: With the Federal Reserve showing interest in cutting rates (and actually doing so on September 16), the yield advantage that once favored the dollar began to fade.
As investors reduced exposure to U.S. assets, capital rotated into other major currencies. The CAD, being liquid and commodity-linked, was one of the key beneficiaries, strengthening almost by default as the greenback lost ground.
- Diverging Monetary Policy
Monetary policy divergence became another major driver. The Bank of Canada held its policy rate steady near 2.75% through Q2 2025 before cutting in September, signaling confidence that inflation was cooling without stalling growth. Meanwhile, the U.S. Federal Reserve began easing monetary policy with its first rate cut in September 2025, responding to slowing growth and softer inflation. This divergence in pace and tone helped support the Canadian dollar’s rebound.
This narrowing interest rate gap mattered. And with Canada offering relatively higher yields, foreign investors found the loonie more attractive, especially compared to the softening U.S. dollar. For traders, the CAD started to look like a better carry trade than it had in over a year.
- Easing Tariff Fears
Another major psychological lift came from the fading of tariff risks. In the first half of 2025, Trump’s proposed 25% tariffs on Canadian goods lost traction as political attention shifted elsewhere. While some concerns still lingered, the immediate threat of a trade shock began to ease. Cross-border trade flows regained a bit of momentum, and markets started to price in a smoother path for Canadian exports. That renewed confidence played a key role in supporting the loonie’s recovery.
Can the Loonie Hold Its Ground?
As 2025 moves forward, the consensus among analysts is cautious but constructive. Most expect the Canadian dollar to trade in the 1.33-1.36 range against the U.S. dollar, a level that points to stability. The worst of 2024’s volatility seems to be behind it, but the loonie’s next moves will still depend on how the global story unfolds.
A Currency That Refused to Stay Down
The past two years have been anything but smooth for the CAD, but this move has proven one thing: resilience runs deep. After weathering policy shifts, tariff scares, and market pessimism, the loonie has managed to rebuild its footing in 2025. Its recovery hasn’t been dramatic. It was grounded in solid fundamentals and steady confidence. For traders, that’s a reminder that sentiment can turn just as fast as it fades.