Canadian Loonie Hits Nine-Day Low as US Rate Hike Bets Rise

The Canadian dollar weakened to its lowest level in nine days against the US dollar on Friday, after US inflation data suggested a higher likelihood of a Federal Reserve interest rate hike next week.

The loonie fell 0.2% to C$1.3862 per US dollar, or 72.14 US cents, with its lowest point at C$1.3883 during the session. This decline follows a 0.2% drop over the week.

Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull, attributed the weakness to rising expectations for a US interest rate hike. He noted that higher oil prices have increased inflation expectations globally, leading to a selloff in bond markets.