March 27, 2020 / 1:09 PM / 2 months ago

CANADA FX DEBT-Loonie pulls back from 10-day high as investor sentiment sours

    * Canadian dollar falls 0.7% against the greenback
    * Loonie touches its strongest intraday since March 17 at
1.3990
    * Price of U.S. oil decreases 3.5%
    * Canadian bond yields decline across the curve

    TORONTO, March 27 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, with the currency
pulling back from an earlier 10-day high as the spread of the
new coronavirus weighed on stocks and the price of oil.
    Shares globally          declined in a sign investors were
focusing once more on the spread of the virus despite hopes for
further stimulus measures to combat its economic impact.
            
    Some economists say that Canada's economy could he hit
particularly hard because Canadian households are carrying
record levels of debt and Canada is a major exporter of
commodities, including oil.
    Oil has been pummeled since January by demand destruction
related to the virus and a price war between major producer
countries. On Friday, U.S. crude oil futures        were down
3.5% at $21.81 a barrel.             
    At 8:51 a.m. (1251 GMT), the Canadian dollar          was
trading 0.7% lower at 1.4123 to the greenback, or 70.81 U.S.
cents. The currency touched its strongest intraday level since
March 17 at 1.3990.
    Canada has tripled the amount of mortgage securities it was
prepared to buy to C$150 billion so that funding could expand
for lenders dealing with tighter credit markets. It has also
almost doubled the value of an aid package to C$52 billion to
help people and businesses deal with losses from the outbreak.
                           
    Canadian government bond yields fell across the curve on
Friday, with the 10-year             down 10.7 basis points at
0.735%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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