March 11, 2020 / 2:27 PM / in 5 months

CANADA FX DEBT-Canadian dollar edges lower as oil price war intensifies

    * Canadian dollar dips 0.1% against the greenback
    * Price of U.S. oil declines 2.1%
    * Canada announces C$1 billion fund to fight coronavirus
outbreak
    * Canadian bond yields fall across a flatter curve

    TORONTO, March 11 (Reuters) - The Canadian dollar weakened
slightly against the greenback on Wednesday as Saudi Arabia
intensified its oil price war with Russia, while Prime Minister
Justin Trudeau announced fiscal spending to help contain the
coronavirus outbreak.
    At 10:05 a.m. (1405 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3738 to the greenback, or 72.79 U.S.
cents. The currency, which on Tuesday hit a four-year low at
1.3796, traded in a range of 1.3682 to 1.3752.
    Canada is setting up a C$1 billion fund to help provinces
combat a worsening coronavirus outbreak and is prepared to spend
more money if necessary, Trudeau said.             
    Last week, the Bank of Canada cut interest rates by 50 basis
points to help cushion the economic impact of the virus.
Expectations that the central bank will ease by a further 50
basis points in April have climbed in recent days after the
price of oil, one of Canada's major exports, crashed.
                       
    U.S. crude oil futures        were down 2.1% at $33.63 a
barrel after Saudi Arabia and the United Arab Emirates announced
plans to boost production capacity. Meanwhile U.S. stock indexes
fell sharply as skepticism grew about the stimulus package
announced by Washington to fight the coronavirus epidemic.
                        
    Canadian government bond yields declined across a flatter
yield curve, with the 10-year yield down 14.9 basis points at
0.487%. On Monday, the 10-year yield hit a record intraday low
at 0.233%.    

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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