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The U.S. dollar hasn’t had a good 2017 when compared to other major developed and emerging market currencies, but the loonie isn’t benefitting.

The U.S. dollar index, a measure of the average exchange rate between the greenback and major world currencies, has declined as much as four per cent this year.

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The loonie, meanwhile, has fallen to 74.5 cents US from more than 76 cents US in early February, continuing a downward trend from its recent peak of almost 80 cents in May 2016.

Much of the weakness in the American currency appears to stem from concerns that the Federal Reserve may not pursue interest rate hikes at the quite the pace the market had hoped for.

A more optimistic tone from the European Central Bank on March 9 also convinced many in the currency market that the Fed won’t be alone in monetary policy tightening.

Politics are also playing a role, particularly given the uncertain trajectory for the new administration in the White House.