March 10, 2020 / 1:36 PM / 4 months ago

CANADA FX DEBT-Canadian dollar firms as oil prices rebound on stimulus hopes

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil climbs nearly 9%
    * Loonie trades in a range of 1.3610 to 1.3710
    * Canadian bond yields rise across the yield curve

    TORONTO, March 10 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday as hopes for
coordinated policy action to cushion the economic impact of
coronavirus helped support stocks globally and the price of oil,
one of Canada's biggest exports.
    Oil prices jumped a day after the biggest rout in nearly 30
years as investors eyed the possibility of economic stimulus and
Russia signaled that talks with OPEC remained possible. U.S.
crude oil futures        were up nearly 9% at $33.92 a barrel.
            
    On Monday, U.S. President Donald Trump promised "major"
steps to combat the virus outbreak and said he would discuss a
payroll tax cut with congressional Republicans.             
    At 9:16 a.m. (1316 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3678 to the greenback, or 73.11 U.S.
cents. The currency, which on Monday hit its weakest intraday
level in nearly three years at 1.3760, traded in a range of
1.3610 to 1.3710.
    The loonie rose even as the U.S. dollar        gained
against a basket of major currencies, with the greenback
rebounding after huge losses against the yen and the euro.
                 
    Canada's federal budget may be delayed and the deficit
likely will be higher than had been expected as oil prices slump
and the coronavirus spreads, economists said on Monday.
            
    Canadian banks have increased oil and gas lending at about
double the rate of total business loan growth over the past
three quarters, raising the prospect of higher loan losses after
Monday's oil price crash.             
    Canadian government bond yields rose in sympathy with U.S.
Treasuries, with the 10-year yield up 5.4 basis points at
0.583%. On Monday, the 10-year yield hit a record low at 0.233%.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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