The Bank of Canada's largest interest rate hike in 24 years caused the loonie to drop to a 20-month low as investors feared the U.S. Federal Reserve would mirror the full percentage point hike in two weeks.
The Canadian dollar dropped to a low of 75.62 cents US in early trading, its lowest level since Nov. 4, 2020 and nearly one-a-half-cent drop from 77.07 cents US on Wednesday.
Bregar said the loonie is at a “critical juncture” - it can rally from the lows or fall even further because there's not a lot technically to stop a bigger decline. He said he's waiting for U.S. housing and retail sales data before deciding whether to support an increase above the expected three-quarters of a percentage point.
Scotiabank chief currency strategist Shaun Osborne said “risk aversion” was dragging the Canadian dollar lower after the Bank of Canada's bold move.
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