The value of the loonie hit a four-month low compared with the U.S. dollar on Wednesday, but some experts say Canadian consumers shouldnB次元官网网址檛 expect their wallets to take a major hit.

The Canadian dollar traded at 72.54 U.S. cents on Wednesday, the lowest it has been since October.

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 CanadaB次元官网网址檚 inflation rate should be minimal.

B次元官网网址淭his is pretty small potatoes in terms of the inflation rate. WeB次元官网网址檙e talking a decimal place here or there,B次元官网网址� Shenfeld said.

B次元官网网址淓ven if something is an imported good, the import price doesnB次元官网网址檛 tend to pass on all the exchange rate moves. It tends to show up in things like fresh fruits and vegetables, but if youB次元官网网址檙e talking about a T-shirt at the department store, it was probably made outside North America.B次元官网网址�

The Bank of Canada held its key interest rate at 4.5 per cent Wednesday based on its assessment of recent economic data. Shenfeld noted the central bank signalled it wonB次元官网网址檛 respond to a modest further weakening of the currency.

B次元官网网址淕iven the choice, I think Canadians would be happier not to see another rate hike than to protect the Canadian dollar from another cent or two slide,B次元官网网址� he said.

Darcy Briggs, senior vice-president and portfolio manager at Franklin Templeton Canada, said he expected the loonie would continue to trade soft until the U.S. Federal Reserve reaches the end of its tightening cycle.

B次元官网网址淭hatB次元官网网址檚 the thing with currencies. They make some pretty dramatic moves pretty [quickly],B次元官网网址� he said. B次元官网网址淭heyB次元官网网址檒l kind of lay in limbo and then volatility spikes.B次元官网网址�

Briggs said that could make life more expensive in the meantime.

B次元官网网址淚f the Canadian dollar is depreciating, and itB次元官网网址檚 depreciating against the number of currency baskets, then any products that we import, by definition, will be more expensive because weB次元官网网址檙e paying it with a cheaper Canadian dollar,B次元官网网址� he said.

B次元官网网址淭hat will take a bite out of consumption and itB次元官网网址檒l actually factor into inflation.B次元官网网址�

University of Toronto economist Angelo Melino predicted the divergence between the Canadian and U.S. interest rates to last at least 10 months.

But while the weakened loonie could make products denominated in U.S. dollars, more expensive, Melino said the effect on the Canadian inflation rate wonB次元官网网址檛 be major.

B次元官网网址淭heyB次元官网网址檙e going to matter for specific goods and services,B次元官网网址� he said.

B次元官网网址淚f youB次元官网网址檙e planning to go to Florida for vacation, or Disneyland, youB次元官网网址檙e going to see it right away.B次元官网网址�

Should the Canadian dollar remain low for an extended period, Melino said that could create a shift in demand away from U.S goods and services toward Canadian ones.

B次元官网网址淏oth Canadians and Americans will be buying goods and services produced in Canada and that tends to be good for Canadian output, but also inflationary,B次元官网网址� he said.

B次元官网网址擲ammy Hudes, The Canadian Press