TORONTO _ The Canadian dollar was lower Tuesday as the greenback appreciated sharply on rising interest rate concerns ahead of next week's meeting of the U.S. Federal Reserve.
The loonie fell 0.33 of a U.S. cent to 79.06 cents.
The greenback hit multi-year highs against a variety of currencies amid increased speculation that the U.S. Federal Reserve could move earlier than expected to start to raise interest rates from near zero, where they have been since the 2008 financial collapse.
The latest round of Fed nervousness started Friday with the release of a much better than expected U.S. employment report for February. It picked up Monday night after Dallas Federal Reserve Bank president Richard Fisher said policymakers should move sooner and slower rather than later and faster.
Markets could get more clarity on Fed intentions when the central bank holds its next interest rate meeting next week.
Meanwhile, the stronger dollar helped push the April crude contract in New York down 24 cents to US$49.76 a barrel. A stronger greenback makes U.S. dollar denominated commodities more expensive for holders of other currencies.
May copper fell five cents to US$2.62 a pound. April gold added 20 cents to US$1,166.70 an ounce.
It is a quiet day for North American corporate and economic data.
Overseas, China's inflation rebounded to above one per cent in February, driven by a faster rise in food costs. Consumer prices rose 1.4 per cent in February over a year earlier, up from January's 0.8 per cent rate. Food prices rose 2.4 per cent.
Low inflation gives Beijing room to stimulate the slowing economy with less danger of triggering a politically dangerous rise in living costs.
The major North American reports this week are U.S. retail sales for February, which are out Thursday, and the Canadian employment report for February, which Statistics Canada will release Friday morning.