TORONTO (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as measures taken by global central banks to cushion the economic impact of the coronavirus outbreak failed to calm financial markets, with stocks and the price of oil tumbling.
At 9:06 a.m. (1306 GMT), the Canadian dollar CAD=D4 was trading 0.9% lower at 1.3932 to the greenback, or 71.78 U.S. cents. The currency, which hit on Friday hit a four-year low at 1.3996, traded in a range of 1.3730 to 1.3940.
Stocks globally .WORLD and the price of oil, one of Canada’s major exports, continued to nose-dive after the second emergency cut by the Federal Reserve in as many weeks - effectively to zero - and supportive measures from all corners failed to quell coronavirus fears.
U.S. crude oil futures CLc1 were down 8.5% at $29.03 a barrel.
The Fed’s move to slash interest rates could raise speculation that the Bank of Canada will ease further. Canada’s central bank cut its key policy rate on Friday by 50 basis points in an emergency move to leave it at 0.75%.
“It’s doubtful the BoC will wait until their next policy meeting in April to slash rates a final 50 bps,” Benjamin Reitzes, a Canadian rates & macro strategist at BMO Capital Markets, said in a research note.
Canadian Prime Minister Justin Trudeau on Sunday would not rule out closing borders to combat the coronavirus outbreak, while the chief medical officer said time was running out to prevent a spike in cases.
Canadian government bond yields fell across the curve in sympathy with U.S. Treasuries. The 10-year yield CA10YT=RR was down 17.5 basis points at 0.672%.
Canadian home sales rose 5.9% in February from the previous month, led by a jump in activity in the Greater Toronto Area, the Canadian Real Estate Association said.
Canadian manufacturing data for January is due on Tuesday and the February inflation report is set for Wednesday.
Reporting by Fergal Smith; Editing By Steve Orlofsky