Canadian dollar strengthens 0.4 against the greenback
Touches its highest since May 8 at 1.3322
BoC hikes interest rates by 25 basis points
2year yield jumps to highest since July 2001

TORONTO, June 7 Reuters The Canadian dollar strengthened to a fourweek high against its U.S. counterpart on Wednesday as investors bet that the Bank of Canada would continue to raise interest rates next month after it tightened for the first time since January.

The Canadian central bank hiked its benchmark rate by 25 basis points to 4.75, the highest level in 22 years, on increasing concerns that inflation could get stuck significantly above its 2 target amid persistently strong economic growth.

The tone of the statement was pretty hawkish, which is not a surprise given the recent data flow, Benjamin Reitzes, Canadian rates macro strategist at BMO Capital Markets, said in a note. If the data remain firm over the coming few weeks, another 25 basis point hike in July looks likely.

Money markets see a roughly 60 chance of another rate increase in July and have fully priced in further tightening by September.

The Canadian dollar was trading 0.4 higher at 1.3350 to the greenback, or 74.91 U.S. cents, after touching its strongest intraday level since May 8 at 1.3322.

Adding to support for the loonie was data showing that Canada39;s exports jumped 2.5 in April and hit an alltime high by volume.

The price of oil , one of Canada39;s major exports, climbed 1 to 72.46 a barrel, supported…