Global currencies, including the Canadian dollar, were under pressure on Tuesday as currency traders piled into the U.S. dollar as a safe haven asset amid growing recession concerns.

“The [U.S.] dollar is rolling through foreign exchange markets like an unstoppable juggernaut this morning, crushing major and exotic currencies alike,” Karl Schamotta, chief market strategist at Corpay, in a note to clients.

The loonie sank more than an entire penny against the U.S. dollar to 76.71 cents U.S. on Tuesday -- a significant move by normal trading standards.

The euro, meanwhile, hit its lowest level against the greenback since 2002.

Investors are on the hunt for places to hide in the market as “worries about a worldwide economic downturn outweigh hopes of a rapprochement with China, hurting risk appetite and heightening demand for safe assets,” Schamotta said.

“The euro is trading near a 20-year low, on course to challenge parity with the dollar as investors lower European Central Bank policy expectations,” he added. “Sentiment indicators are pointing to recession in the bloc’s biggest economies, limiting the central bank’s capacity to respond to high inflation by raising interest rates.”

In addition to U.S. dollar strength, a drop in crude prices is also heaping pressure on the Canadian dollar. The West Texas Intermediate benchmark plunged more than eight per cent Tuesday to settle at US$99.50.

Investors appear to be brushing off another potential supersized interest rate hike from the Bank of Canada next week, even after two surveys released by the Canadian central bank on Monday showed consumers and businesses are expecting inflation to run much hotter for longer.

“[Monday’s Bank of Canada] surveys confirm our view that the bank will hike by 75 [basis points] at the next meeting in a few weeks. Even still, markets have this priced in alongside decent odds of another non-standard sized hike at the September meeting as well,” Bipan Rai, North America head of FX strategy at CIBC Capital Markets, said in a note Tuesday.

He also noted an expected divergence in monetary policy between the U.S. Federal Reserve and European Central Bank as underpinning weakness in the euro.

“The slide lower in [euro/U.S. dollar] is reflective of the proximity of a recession in the Eurozone as the price for gas soars in the EU. That’s helping to lift the [U.S. dollar] elsewhere as the Fed continues to look like the central bank that few are going to match when it comes to hiking rates,” he said.