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The Canadian dollar CADUSD strengthened to a four-week high against its U.S. counterpart on Wednesday as investors bet that the Bank of Canada would continue to raise interest rates next month after it tightened for the first time since January.

The Canadian central bank hiked its benchmark rate by 25 basis points to 4.75%, the highest level in 22 years, on increasing concerns that inflation could get stuck significantly above its 2% target amid persistently strong economic growth.

“The tone of the statement was pretty hawkish, which is not a surprise given the recent data flow,” Benjamin Reitzes, Canadian rates & macro strategist at BMO Capital Markets, said in a note. “If the data remain firm over the coming few weeks, another 25 basis point hike in July looks likely.”

Money markets see a roughly 60% chance of another rate increase in July and have fully priced in further tightening by September.

The Canadian dollar was trading 0.2% higher at 1.3380 to the greenback, or 74.74 U.S. cents, after touching its strongest intraday level since May 8 at 1.3322.

Adding to support for the loonie was data showing that Canada’s exports jumped 2.5% in April and hit an all-time high by volume.

One of Canada’s major exports is oil. It settled 1.1% higher at $72.53 a barrel, supported by Saudi Arabia’s surprise weekend pledge to deepen output cuts.

Analysts expect the loonie to rally to 1.29 in one year, according to the median forecast in a Reuters poll.

The Canadian 2-year yield jumped to its highest level since July 2001 at 4.781% before easing back to 4.602%, up 20.8 basis points on the day. That moved it above the equivalent U.S. rate for the first time since September.

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