The Canadian dollar has fallen to a 20-month low following the Bank of Canada's latest interest
rate increase.
The central bank’s surprise full percentage point interest rate hike, its biggest one-time increase
since 1998, sent the Canadian dollar down to a low of 75.62 cents U.S., its lowest level since
November 4, 2020.
Currency traders fear the U.S. Federal Reserve will follow the Bank of Canada and undertake a
full percentage point rate hike at its next meeting at the end of July.
The Canadian dollar pared some of its losses yesterday (July 14) after U.S. Federal Reserve
Governor Christopher Waller said the market was “getting ahead of itself” concerning interest
rate expectations.
The U.S. dollar has been marching higher lately amid mounting concerns of a global recession.
The greenback gained ground against all major currencies as short-term yields rose after the
annual inflation rate in the U.S. reached 9.1% in June, its highest level since December 1981.
The Canadian dollar has also been impacted over the past week by softening energy prices.
August crude oil contracts fell to $90.56 U.S., the lowest level since February of this year,
putting downward pressure on the loonie.
