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The Canadian dollar edged higher against its U.S. counterpart on Friday as the central bank of top commodity consumer China moved to calm markets, while Canada’s 10-year yield climbed to a five-week high.

Copper prices rose after the People’s Bank of China infused liquidity to ease nerves caused by property giant China Evergrande Group’s debt woes.

Canada is a major exporter of commodities, including copper and oil. Copper rallied 1.5 per cent, while oil gave back some of this week’s gains, falling 1.2 per cent to $71.74 a barrel.

The Canadian dollar was trading 0.1 per cent higher at 1.2670 to the greenback, or 78.93 U.S. cents, after trading in a range of 1.2637 to 1.2690. For the week, the loonie was on track to advance 0.1 per cent.

Investors are awaiting a Federal Reserve interest rate decision next week and a Canadian federal election.

Foreign investors are growing more worried that Canada’s election on Monday could result in a deadlock that hampers Ottawa’s response to the COVID-19 pandemic and further slows the economic recovery from the crisis.

On Thursday, Fitch Ratings cut its 2021 growth forecast for the Canadian economy to 5 per cent from 6.6 per cent.

Fitch last year stripped Canada of one of its coveted triple-A credit ratings, but S&P Global Ratings and Moody’s Investors Service still give Canadian debt the highest rating.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.

The 10-year touched its highest level since Aug. 11 at 1.289 per cent before dipping slightly to 1.282 per cent, up 4.6 basis points on the day.

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