The U.S. dollar saw “a broad based appreciation” after the market learned three Federal Open Market Committee members wanted to hike rates in September, says a new CIBC FX outlook report (the dissenting members were Esther L. George of the Federal Reserve Bank of Kansas City, Loretta J. Mester of the Federal Reserve Bank of Cleveland and Eric Rosengren of the Federal Reserve Bank of Boston).

Read: Fed minutes put November rate hike on the table

Investors should expect the U.S. dollar to continue to gain, says CIBC, “as the Fed gears up to pull the trigger in December.” As of October 28 at 12:30pm, CME Group’s FedWatch tool showed 67.5% of the market is calling for a hike in December, versus only 9.3% in November.

On the domestic front, CIBC adds, the loonie would likely dip on the back of an upcoming Fed rate hike–already, Bank of Canada Governor Poloz’s dovish outlook and disappointing growth are weakening the currency.

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CIBC forecasts further weakness for the next couple of quarters, and says items to watch include the Fed’s November 2 announcement, the results of the U.S. election and Canadian GDP numbers (to be released on November 30). Read the full FX outlook.

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