Canadian dollar steadies as measure of stock market fear eases By Reuters

© Reuters. A Canadian dollar coin, commonly known as the “Loonie”, is pictured in this illustration picture taken in Toronto

TORONTO (Reuters) – The Canadian dollar edged higher against its U.S. counterpart on Tuesday, clawing back some earlier losses as oil prices rose and a measure of expected stock market volatility fell to a 10-week low.

The VIX Index () fell more than 4%, its fourth straight daily decline, as moves by China to waive off tariffs on some U.S. imports helped boost global shares <.world>. Trade tensions between the two countries have resurfaced.

Canada is a major exporter of commodities, including oil, so the tends to be particularly sensitive to the global flow of trade and capital.

U.S. crude oil futures () were up 5.3% at $25.43 a barrel, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain a supply glut built up during the coronavirus crisis.

The Canadian dollar was trading nearly unchanged at 1.3995 to the greenback, or 71.45 U.S. cents. The currency, which has fallen about 7% this year, touched its weakest intraday level since May 7 at 1.4064.

Ottawa, which is rolling out about C$300 billion in fiscal measures to support Canada’s economy, on Monday said it would be the lender of last resort for large Canadian employers that need help getting through the economic downturn, including those in the hard-hit airline and energy sectors.

Canadian government bond yields rose at the front of the curve, with the 2-year () up 2.1 basis points at 0.305%.

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