Canadian Dollar Weakens as Investors Bet on Federal Reserve Rate Hike

The Canadian dollar weakened on Tuesday as investors bet on a Federal Reserve interest rate hike next month. The loonie was trading 0.4% lower at 1.3905 per U.S. dollar, or 71.92 U.S. cents.

This decline puts it among the biggest decliners in the Group of 10 currencies. Amo Sahota, director at Klarity FX, attributed this weakness to increased bets that the Fed will raise interest rates in September to meet its 2% target.

The Bank of Canada is expected to leave its benchmark interest rate on hold at 2.25% on Wednesday despite recent GDP data showing a faster economy growth pace than forecasted by the central bank.