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The Canadian dollar weakened to a four-week low against its broadly stronger U.S. counterpart on Friday, as investors weighed the risk of the Federal Reserve taking steps that could tighten policy at an interest rate announcement next week.

The loonie was trading 0.6% lower at 1.2169 to the greenback, or 82.18 U.S. cents, its biggest decline since April 20. It touched its weakest intraday level since May 14 at 1.2177. For the week, it was down 0.8%.

“This is a broad dollar story, where we’ve seen a hard bounce in the (U.S.) dollar index and dollar-CAD has come along for the ride,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. “The market was ripe for this correction, and it could extend for another day or two.”

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The U.S. dollar rallied as investors bet interest rates would stay lower for longer in Europe.

“We have a jittery market ahead of the FOMC next week. It’s a critical event,” Anderson said, referring to the Fed’s Federal Open Market Committee.

Avenues the Fed could use to tighten policy include raising the interest rate it pays on excess reserves, projecting an earlier date for its first rate hike and acknowledging the time has come to talk about tapering of quantitative easing.

With commodity prices soaring, the Canadian dollar has been the top-performing G10 currency this year, up 4.7% against the greenback.

A stronger loonie is usually seen hurting exporters, but the nature of the global economic recovery could help companies pass on their higher costs from the currency to customers, leaving exporters in less pain than in previous cycles.

Oil, one of Canada’s major exports, touched a multi-year high at $71.24 a barrel.

The Canadian 10-year yield hit its lowest level since March 3 at 1.368% before recovering to 1.380%, up nearly one basis point on the day.

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