Canadian Dollar Tumbles to One-Week Low Amid Strong U.S. Dollar

The Canadian dollar experienced a decline against the U.S. dollar on Thursday, reaching a one-week low as investors weighed the Federal Reserve's outlook and the strength of the greenback.

USD/CAD was trading at around C$1.3880, up about 0.01%, with the pair hovering in a narrow range between C$1.3873 and C$1.3891 during the session. This left the Canadian dollar near 72.0 U.S. cents, relatively unchanged from Wednesday's levels.

The pressure on the Canadian currency came primarily from the broad strength of the U.S. dollar. The dollar index stood at 99.158, up about 0.3% for the week, as investors positioned themselves ahead of Federal Reserve Chair Kevin Warsh's appearance at the Jackson Hole symposium.

The recent U.S. data reinforced expectations that interest rates could remain elevated. July's personal consumption expenditures price index rose 3.7% year over year, slightly above economists' expectations, while the monthly measure increased 0.2%. U.S. second-quarter economic growth was also confirmed at an annualized 1.5%, which has contributed to the strong U.S. rate outlook.