(Toronto) The Canadian dollar fell again, reaching lows not seen in more than two years, the day after the announcement of a new interest rate hike by the American Federal Reserve.
Posted at 3:09 p.m.
The loonie slipped below 75 cents US 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, says the Canadian dollar is facing a trio of intertwined pressures, including rising US interest rates, falling stock markets and a widespread migration to safety from the US greenback. .
According to Mr. Madhavji, 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 believes that persistent inflation in the United States is likely to herald more rate hikes and more pressure on the markets, which should also translate into more difficulties for the loonie in the months ahead.
However, the Canadian dollar is doing better than most other currencies. National Bank noted earlier this month that it had performed best among the ten major currencies against the US dollar this year.