March 19, 2020 / 1:35 PM / 4 months ago

CANADA FX DEBT-Canadian dollar bounces off 4-year low as oil rallies

    * Canadian dollar rises 0.4% against the greenback
    * Price of oil increases 9.4%
    * Loonie hits its weakest intraday level in four years
    * Canadian bond yields fall across a flatter curve

    TORONTO, March 19 (Reuters) - The Canadian dollar rose
against its broadly stronger U.S. counterpart on Thursday as oil
rallied and central banks tried to contain economic damage from
the coronavirus pandemic, with the loonie recovering from an
earlier four-year low.
    At 9:24 a.m. (1324 GMT), the Canadian dollar          was
trading 0.4% higher at 1.4459 to the greenback, or 69.16 U.S.
cents. The currency touched its weakest intraday level since
January 2016 at 1.4669.         
    The price of oil, one of Canada's major exports, rebounded
after a three-day selloff sparked by the spread of the
coronavirus and a market share battle between Saudi Arabia and
Russia drove it to its lowest in almost two decades. U.S. crude
       prices were up 9.4% at $22.28 a barrel.             
    The dollar        surged as additional purchases of
sovereign debt by the European Central Bank and other
extraordinary steps by central banks across the world had mixed
success, boosting bonds but failing to  halt losses in stocks.
            
    On Wednesday, Bank of Canada Governor Stephen Poloz left the
door open to further interest rate cuts and Canadian Prime
Minister Justin Trudeau said his government would provide C$27
billion in stimulus directly to Canadian families and
businesses.             
    Canada added jobs in February for the eighth consecutive
month but the 7,200 increase was the smallest since October, a
report from payroll services provider ADP showed on Thursday.
            
    Canadian government bond yields fell across a flatter curve,
with the 10-year down 3 basis points at 1.015%. The gap between
Canada's 10-year yield and the U.S. equivalent narrowed by 13.5
basis points to a spread of 7.8 basis points in favor of the
U.S. bond.

 (Reporting by Fergal Smith)
  
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