The Financial Post reports in its Wednesday edition that the loonie rose 0.6 per cent on Tuesday to take it above 71 U.S. cents for the first time in a month as the greenback slumped on cooler-than-expected inflation in the United States. The Post's Gigi Suhanic writes that U.S. inflation for June was 3.5 per cent year over year, better than the expected 3.8 per cent and down from May's 4.2 per cent. The core measure was flat month over month, while a 0.2-per-cent increase was anticipated. Monex's Nick REES says, "That has put a substantial damper on the dollar, seeing the U.S. dollar index fall sharply post-release as traders pare back Fed hiking bets for the second half of the year." Bets for the Federal Reserve to hike rates in July have now fallen to 10 per cent from about 40 per cent on Monday. Bets for rate hikes further into the last half of the year were also pared back. In response, the U.S. dollar index, which measures the greenback against a basket of other major currencies, including the Canadian dollar, lost about 0.5 per cent Tuesday. "This data is, without a doubt, unambiguously dovish for the Fed," says Mr. Rees. The interest rate differential between Canada and the U.S. is stabilizing the loonie.