The loonie strengthened against a weakening U.S. dollar that slid as President Donald Trump dissolved two of his business advisory councils, including one on manufacturing.

The Canadian dollar was trading at an average price of US78.75¢, up 0.35 of a U.S. cent.

“It’s not that the loonie is strengthening. It’s that the U.S. dollar is weakening,” said Kash Pashootan, a portfolio manager at First Avenue Advisory, a Raymond James company.

One of the primary drivers for the Canadian dollar is the price of oil because the Canadian economy is seen as closely tied to its fortunes.

On Wednesday, however, the commodity’s September contract shed US77¢ to US$46.78 per barrel.

That means the commodity-sensitive loonie’s boost had more to do with a weakening currency for its southern neighbour, said Pashootan.

In the early afternoon, Trump announced on Twitter he was ending two advisory panels — a manufacturing council, and a strategy and policy forum. The move came as a number of CEOs stepped down from the panels, distancing themselves from Trump’s comments that “both sides” held blame for weekend violence in Charlottesville, Va.

Despite the growing political uncertainty in the States, stock indices remained relatively flat.

The S&P/TSX composite index shed 15.63 points to 15,082.21.

On Wall Street, the markets fared better, making small gains. The Dow Jones industrial average rose 25.88 points to 22,024.87 and the S&P 500 index advanced 3.50 points to 2,468.11. The Nasdaq composite index gained 12.10 points to 6,345.11.

Pashootan said this shows a disconnect between the lack of stability in the American political system and capital markets, which are not pricing in the volatility.

“The markets have become complacent, he said. “They’ve just become immune to uncertainty.”

He believes the low volatility has moved a lot of money into equities that would otherwise be in bonds, typically less risky than stocks.

“It’s anyone’s guess what the event is going to be that’s going to cause a correction or a pullback or to bring volatility back into the market,” he said.

Investors aren’t flocking to gold, which is seen as a safe haven in tumultuous times, to the degree one would expect considering ongoing political uncertainty, Pashootan said.

The December gold contract gained US$3.20 to US$1,282.90 an ounce.

Elsewhere in commodities, the September natural gas contract fell US4.5¢ to US$2.89 per mmBTU and the September copper contract rose about US7¢ to US$2.95 a pound.