The Canadian dollar fell slightly against its U.S. counterpart on Tuesday morning after the Bank of Canada raised its key interest rate but warned that economic recovery at home and abroad will be slower than thought, foreshadowing a more hesitant pace of rate hikes from now on.

Last month, the bank became the first in the G7 advanced economies to raise rates from the emergency lows introduced during the global economic crisis. It took a second step on Tuesday by lifting borrowing costs by another 25 basis points to 0.75 percent, a move unanimously predicted by Canada's primary securities dealers. Read more