Canadian Loonie Hits Six-Week Low Amid Fed Rate Hike Bets

The Canadian dollar hit a six-week low against its US counterpart on Wednesday as investors bet on additional interest rate hikes from the Federal Reserve.

The loonie weakened by 0.5% to 1.3990 per US dollar, or 71.48 US cents, after touching its weakest intraday level since August 7 at 1.3994.

The Fed raised its benchmark interest rate by a quarter of a percentage point to the 3.75%-4.00% range and signaled further increases in borrowing costs in coming months, aiming for a timelier return of inflation to its 2% target.

Karl Schamotta, chief market strategist at Corpay, noted that 'The US dollar is grinding higher against all of its major rivals and Treasury yields are edging up across the policy-sensitive end of the curve as investors incrementally raise expectations for another hike by the central bank's December meeting.'