The Canadian dollar is heading lower again, hitting lows not seen in more than two years, a day after the US Federal Reserve raised its key interest rate.
The loonie slipped below 75 US cents earlier this week, and fell even lower after the Fed raised its benchmark rate by three-quarters of a percentage point on Wednesday.
Rahim Madhavji, chairman of Knightsbridge Foreign Exchange Inc., says the Canadian dollar is facing a trio of intertwined pressures, including rising US interest rates, falling stock markets and a general flight to dollar safety. Americans.
He says the loonie is closely linked to the outlook for economic growth and the evolution of stock markets. So, with the markets declining, the currency also slipped.
Madhavji says persistent US inflation will likely mean more rate hikes and more pressure on the markets, which will also mean more pain for the loonie in the months ahead.
The Canadian dollar, however, is doing better than most other currencies, with National Bank noting earlier this month that it is the best performance of the ten major currencies against the US dollar this year.