Canadian dollar is weaker than other G10 currencies

The U.S. dollar weakened against some other currencies. On Thursday the Canadian dollar lost positions against its U.S. counterpart. Despite this, expectations of investors for another strong interest rate increase by the Bank of Canada next week decreased.

After the statement of Federal Reserve System Chairman Jerome Powell about a possible slowdown in the U.S. rate rise in December, the Canadian currency was traded lower. The drop for the Canadian dollar from the previous day's rise was 0.2% to 1.3430 per U.S. dollar, or 74.46 U.S. cents.

The U.S. dollar fell by 1.1% against a basket of major currencies. The Canadian dollar was the only G10 currency that lost positions against the U.S. dollar.

Marc Chandler, chief market strategist at Bannockburn Global Forex LLC said that the Canadian dollar often lags on the back of a weak U.S. dollar.

It is expected that the Federal Reserve System will raise interest rates in the U.S. in this cycle to a higher point than the Bank of Canada. Money markets in Canada are offering lower rates compared to the United States.

According to the money market, Powell's comments contributed to the reduced chances of a 50 basis point rate increase rather than a 25 basis point one. After the policy decision on the following Wednesday, the chances dropped from 30% to about 10%.