CORRECTED-CANADA FX DEBT-Canadian dollar falls as BoC matches U.S. rate cut on coronavirus threat

 (Corrects third paragraph to "since March 2009", not "March
    * Canadian dollar falls 0.1% against the greenback
    * Bank of Canada cuts benchmark interest rate by 50 basis
    * Price of U.S. oil increases 2.1%
    * Canada's 10-year yield hits a record low below 0.900%

    By Fergal Smith
    TORONTO, March 4 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as the Bank of Canada
delivered its biggest interest rate cut in more than 10 years,
matching the previous day's cut in U.S. rates, and signaled that
it was ready to ease further due to the coronavirus outbreak.
    The central bank slashed its benchmark interest rate to
1.25% from 1.75%, saying the outbreak was "a material negative
shock" to the Canadian and global outlooks.
    It was the first the Bank of Canada had cut by more than 25
basis points since March 2009, when the economy was in recession
due to the global financial crisis. The Federal Reserve cut U.S.
rates 50 basis on Tuesday.
    "The virus is expected to take a greater toll on Canada's
economy than the U.S.'s due to weaker commodity prices and less
underlying strength," Sal Guatieri, a senior economist at BMO
Capital Markets said in a note.
    "Lower rates are no vaccine, but they can partially treat
the symptoms of the virus by supporting confidence and shoring
up financial conditions," Guatieri said.
    Canada is prepared to act quickly to help companies hurt
financially by the outbreak of the new coronavirus and would not
need to wait for the next budget, Finance Minister Bill Morneau
said on Tuesday.             
    At 10:30 a.m. (1530 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3394 to the greenback, or 74.66 U.S.
cents. The currency traded in a range of 1.3330 to 1.3417.
    The price of oil, one of Canada's major exports, rose on
expectations that major producers have moved closer to an
agreement to enact deeper output cuts aimed at offsetting the
slump in demand caused by the coronavirus outbreak. U.S. crude
oil futures        were up 2.1% at $48.15 a barrel.             
    Canadian government bond yields were lower across a steeper
yield curve. The 10-year             fell 8.1 basis points to
hit a record low at 0.883%, while the gap between the 10-year
and its U.S. equivalent widened by 3.7 basis points to a spread
of 9 basis points in favor of the U.S. bond.    
    Canadian labor productivity fell by 0.1% in the fourth
quarter, as both hours worked and business output were little
changed, Statistics Canada said. Compared to the same quarter in
2019, productivity was up 0.5%.             
    Canada's jobs report for February is due on Friday.

 (Reporting by Fergal Smith; Editing by David Gregorio)