TORONTO (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Thursday but held near an earlier 10-day low as investors worried that a rise in American coronavirus cases could slow economic recovery.
World stocks spluttered to their lowest level in over a week as a surge in U.S. coronavirus cases and an IMF warning of a nearly 5% plunge in the global economy this year hit the bulls again.
Canada is a major exporter of commodities, including oil, so the loonie tends to be sensitive to the global economic outlook.
Oil was pressured by record-high U.S. crude inventories as well as the resurgence in coronavirus cases that casts doubt on a recovery in fuel demand. U.S. crude oil futures (CLc1) were down 0.3% at $37.88 a barrel, extending the previous day's sharp decline.
The Canadian dollar
The 10-day low for the loonie follows news on Wednesday that Canada lost one of its coveted triple-A ratings when Fitch downgraded it for the first time. Also this week, investors have worried that Washington could reimpose tariffs on Canadian aluminum.
Canadian payroll employment fell by 1.8 million in April as non-essential businesses were closed across the country, data from Statistics Canada showed on Thursday. That brought total job losses since February to 2.8 million, or 16%, which is consistent with data from the labor force survey, the national statistical agency said.
The labor force survey has since showed that Canada unexpectedly added almost 290,000 jobs in May as some provinces loosened COVID-19 restrictions on businesses.
Canadian government bond yields were lower across a flatter curve, with the 10-year (CA10YT=RR) down 3.6 basis points at 0.512%.