February 20, 2020 / 3:18 PM / a month ago

Canadian dollar retreats as investors worry about virus threat

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto, January 23, 2015. REUTERS/Mark Blinch (CANADA - Tags: BUSINESS)

TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as evidence of the coronavirus spreading outside of China weighed on investor sentiment, while a measure of domestic employment showed jobs rose for the seventh straight month.

Stocks globally .WORLD fell as South Korea reported a spike in new cases and Japan reported two new deaths, while research suggested the virus spreads faster than previously thought.

Canada is a major exporter of commodities, including oil, so its economy could be hurt should the coronavirus outbreak slow global growth.

U.S. crude oil futures CLc1 were up 1.3%, supported by China’s efforts to boost its economy and supply concerns in Venezuela and Libya.

At 9:46 a.m. EST, the Canadian dollar CAD=D4 was trading 0.2% lower at 1.3241 to the greenback, or 75.52 U.S. cents. The currency traded in a range of 1.3212 to 1.3265.

Canada added 25,900 jobs in January, led by hiring in the trade, transportation and utilities and construction sectors, according to a report from payroll services provider ADP released on Thursday.

Separate data showed that the Teranet-National Bank Composite House Price Index rose 0.1% in January, paced by gains for the Eastern Canadian metropolitan areas of Hamilton and Montreal.

Canadian bond yields fell across a flatter yield curve in sympathy with U.S. Treasuries. The 10-year yield was down 2.8 basis points at 1.331%.

Canada’s retail sales report for December is due on Friday, which could help guide expectations for the Bank of Canada interest rate outlook. Money markets see about a 40% chance that the central bank would ease by April. BOCWATCH

Reporting by Fergal Smith; editing by Jonathan Oatis

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