The Canadian dollar has fallen below the 75-cent U.S. mark for the first time since 2020 amid broad U.S. dollar strength.

The loonie fell as low as 74.94 cents in early trading as investors piled into the greenback, the lowest level since early November, 2020.

In spite of the recent relative weakness against the benchmark U.S. dollar, the Canadian dollar is still far-and-away the best performing G10 currency relative to the greenback this year, down 5.01 per cent.

By comparison, the Japanese Yen is down 19.79 per cent against the U.S. dollar this year.

In a note to clients, Scotiabank Chief Foreign Exchange Strategist Shaun Osborne said the move higher in the U.S. dollar is entirely reasonable, based on rate hike expectations.

“Signs of slowing global trade are a heads up of building recession risks but central banks this week are expected to push ahead with rate hikes,” he said.

“The Fed is poised to lift the Fed funds target at least 75bps, but could go for a 100bps move and might sound hawkish even if it doesn’t to tee up another jumbo hike in [November].”

The U.S. Federal Reserve’s next decision comes down Wednesday, with expectations for a three-quarter of a percentage point increase to bring the target range to three to 3.25 per cent. That would mark a three per cent increase in the fed’s benchmark rate from the pandemic lows.