Canadian Dollar Hits Nine-Day Low as Fed Rate Hike Bets Soar

The Canadian dollar weakened to its lowest level in nine days on Friday due to rising expectations of a Federal Reserve interest rate hike. The loonie was trading at 1.3862 per US dollar, down 0.2% from the previous day and marking a nine-day low.

Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull, attributed the currency's weakness to rising expectations for Fed rate hikes. The US inflation data released on Friday showed that consumer prices accelerated in August, while underlying inflation posted its largest increase in four months.

The loonie had benefited from a more hawkish message from the Bank of Canada last week, but this week it has been about the US dollar rallying with yields and oil. Soaring oil prices have raised the outlook for global inflation, leading to a steep sell-off in bonds.