Loonie hits four-month low as Bank of Canada holds key interest rate

The value of the loonie hit a four-month low compared with the U.S. dollar on Wednesday, but some experts say Canadian consumers shouldn't expect their wallets to take a major hit.

The Canadian dollar traded at 72.54 U.S. cents on Wednesday, the weakest level in more than five months.

CIBC chief economist Avery Shenfeld said the weak loonie is reflective of the U.S. Federal Reserve getting more aggressive on interest rate hikes while the Bank of Canada holds its key rate steady for the first time in a year.

While import cost hikes could lead to higher prices for items such as groceries, he said the effect on Canada's inflation rate should be minimal.