The Canadian dollar has fallen to its lowest level against the U.S. currency since November
2020 as growing fears of a global recession push investors to the safe haven of the greenback.
The U.S. dollar has hit multi-year highs against most major currencies in recent weeks as
stubbornly high inflation and rising interest rates increase the prospects that the global economy
will tip into a recession in coming months.
Against the Canadian dollar, the greenback rose 0.6% to 1.3240, its highest level since
November 2020.
The new highs for the American currency come ahead of a meeting of the U.S. Federal Reserve
next week, when the central bank is widely expected to raise interest rates another 75 basis
points. Economists are now forecasting that the U.S. federal funds rate will peak at close to
4.5% next year.
The U.S. dollar has been strengthening along with Treasury yields. The two-year rate on U.S.
Treasuries was up as much as eight basis points to 3.87%, its highest level since 2007.
However, despite its poor performance against the U.S. dollar, the loonie has been one of the
better performing currencies in 2022, bolstered by higher prices for agriculture and energy
products.
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