The Canadian dollar was little changed against its U.S. counterpart on Tuesday, with the currency hovering near a six-week low it hit on Friday as investors worried about rising trade tensions between the United States and China.
A year-long U.S.-China trade war has boiled over as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade.
Canada exports many commodities, including oil, so its economy could be hurt by an escalation of trade tensions.
At 10:06 a.m., the Canadian dollar was trading nearly unchanged at 1.3222 to the greenback, or 75.63 U.S. cents. The currency traded in a range of 1.3188 to 1.3236.
On Friday, the currency hit its lowest intraday since June 20 at 1.3265.
The loonie’s six-week low on Friday came as data showed Canadian exports fell by 5.1 per cent in June, the first drop since February.
Meanwhile, the price of oil rebounded slightly on Tuesday from big falls in recent sessions amid escalating trade tensions. U.S. crude oil futures were up 0.4 per cent at $54.88 a barrel.
Canadian government bond prices were higher across the yield curve, with the two-year up 16 cents to yield 1.377 per cent and the 10-year rising 83 cents to yield 1.289 per cent.
The gap between Canada’s 2-year yield and its U.S. equivalent narrowed by 9.6 basis points to a spread of 22.2 basis points in favour of the U.S. bond, the narrowest gap since July 8.
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