The Canadian dollar strengthened to a one-week high against its US counterpart on Wednesday as a rally in stocks suggested that the turbulence in financial markets is fading. At 4:05 pm EST (2100 GMT), the Canadian dollar was trading 0.7 percent higher at C$1.2503 to the greenback, or 79.98 US cents. The currency's weakest level of the session was C$1.2649, while it touched its strongest since February 7 at C$1.2502.
The VIX index, a popular options-based gauge of expected stock market volatility, hit its lowest since February 5.
Canada's commodity-linked currency had fallen as much as 3.3 percent after Wall Street lurched sharply lower earlier this month.
Canadian government bond prices were lower across the yield curve in sympathy with US Treasuries. The two-year was down 8.5 Canadian cents to yield 1.829 percent and the 10-year declined 27 Canadian cents to yield 2.374 percent.
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