The Canadian dollar declined against its major counterparts in European deals on Wednesday, as investors fear that continued monetary tightening in the U.S. could derail the economic growth.

Warnings from several leading bankers about a potential recession next year also dampened risk sentiment.

Next week's Fed meeting is expected to offer more insights about the future trajectory of inflation and growth.

Disappointing trade data out of China offset optimism about a loosening of its zero-COVID policy.

The Bank of Canada will announce its monetary policy decision later in the day. The BoC is widely expected to raise interest rate to 4.25 percent from 3.75 percent.

The loonie slipped to 1.3700 against the greenback, its lowest level since November 4. If the currency falls further, it may challenge support around the 1.40 level.

The loonie declined to 1.4403 against the euro, a level unseen since February 24. The loonie is seen finding support around the 1.46 level.

The loonie edged down to 100.13 against the yen and 0.9159 against the aussie, off its early highs of 100.93 and 0.9123, respectively. The next likely support for the loonie is seen around 91.00 against the yen and 0.94 against the aussie.

At 10 am ET, the Bank of Canada will announce its interest rate decision. The BoC is widely expected to raise interest rate to 4.25 percent from 3.75 percent.

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