* . * Canadian dollar strengthens 0.4% against the greenback * Price of U.S. oil increases nearly 5% * Canadian manufacturing activity expands in February * Canada's 10-year yield hits lowest since October 2016 at 1.040% By Fergal Smith TORONTO, March 2 (Reuters) - The Canadian dollar rose against its U.S. counterpart on Monday as investors bet that global central banks would try to ease the economic impact of the coronavirus outbreak and data showed domestic factory activity rising at the fastest rate in a year. At 11:30 a.m. (1630 GMT), the Canadian dollar was trading 0.4% higher at 1.3340 to the greenback, or 74.96 U.S. cents. The currency, which on Friday hit its weakest intraday level in nearly nine months at 1.3465, traded in a range of 1.3315 to 1.3445. The loonie is rallying for the same reason as equity markets, said Phil Mesman, head of fixed income at Picton Mahoney Asset Management. "The markets are pricing in (coordinated) central bank intervention," Mesman said. U.S. stocks and the price of oil, one of Canada's major exports climbed on hopes of central bank stimulus and of a deeper cut in output by OPEC. U.S. crude oil futures were up nearly 5% at $46.95 a barrel. Canadian manufacturing activity expanded in February at the quickest pace in a year, data showed, which could provide some reassurance to the Bank of Canada on the outlook for the economy ahead of an interest rate decision on Wednesday. Investors are betting that the central bank will cut rates for the first time in nearly five years. Canadian government bond yields fell across the yield curve in sympathy with U.S. Treasuries. The 10-year yield was down 7 basis points at 1.061%. It touched its lowest intraday level since October 2016 at 1.040%. (Reporting by Fergal Smith; Editing by David Gregorio)
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