Canadian Dollar Hits 7-week Low

The Canadian dollar fell against the US currency on Tuesday as investors weighed the prospects of the Federal Reserve turning less pessimistic, to slide from the highest level in six years at at 1.2007.

The dollar was trading 0.4% lower at 1.2192 per dollar, after touching its weakest level since May 6 at 1.2204.

In its new policy statement and economic outlook due on Wednesday, the Federal Reserve is expected to scale back the massive bond-buying program launched  in 2020.

Canada is a major producer of commodities, including copper, which fell 4%, extending its decline from a record level high in May, and oil, which settled up 1.8% at $72.12 a barrel. The policy supports global economic recovery, raising commodity prices.

Canadian housing rose 3.2% from May, while home sales fell for a second month after a solid start in 2021. The country's CPI, which is due on Wednesday, could provide clues to the Bank of Canada's outlook.

Meantime, the Canadian 10-year yield was recorded 1.389%, touching its lowest level in more than three months at 1.365%.