Loonie Tumbles as Fed Hikes Rates Again, Eyes Another Increase Before Year-End

The Canadian dollar weakened against its U.S. counterpart on Wednesday after the Federal Reserve raised interest rates as expected.

The Fed hiked its benchmark rate by 25 basis points to 3.75%-4.00%, with policymakers signaling another increase before year-end, putting pressure on currencies like the loonie.

The Canadian dollar's weakness follows a run of losses in recent sessions and reflects shifting expectations for the Bank of Canada's policy path, alongside movements in global risk appetite and commodity markets.