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CANADA FX DEBT-Loonie gains as slowing coronavirus spread boosts risk appetite

 (New throughout, updates prices, market activity and comments)
    * Canadian dollar rises 0.6% against the greenback
    * BoC report shows some economic sectors seeing demand
collapse
    * Price of U.S. oil settles nearly 8% lower
    * Canadian bond yields rise across the curve

    By Fergal Smith
    TORONTO, April 6 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday as signs of
a slowdown in coronavirus-related deaths bolstered equity
markets and a measure of Canadian financial system stress eased
for the seventh straight day.
    Stocks globally          rose as the death toll from the
virus slowed across major European nations including France and
Italy.             
    "The mood music in the market is a little more constructive
for risk assets today," said Shaun Osborne, chief currency
strategist at Scotiabank. "The CAD sell off through late March
has stabilized."
    The loonie plunged 4.7% in March, its biggest drop since
January 2015. The currency tends to be sensitive to the global
flow of trade and capital because Canada runs a current account
deficit and is a major producer of commodities, including oil.
    Canadian firms in the accommodation, food services and
recreation sectors have already seen demand collapse during the
coronavirus outbreak while other sectors are still bracing for a
looming economic hit, a special Bank of Canada survey showed.
            
    To support Canada's economy and the financial system, the
central bank has slashed interest rates to 0.25%, embraced
quantitative easing for the first time, buying government bonds
in large quantities, and introduced a gamut of liquidity
measures.
    Those liquidity measures could be helping, with the
one-month rate for bankers' acceptances, a key funding market,
falling 12 basis points on Monday to 1.02%.
    At 3:18 p.m. (1918 GMT), the Canadian dollar          was
trading 0.6% higher at 1.4116 to the greenback, or 70.84 U.S.
cents. The currency traded in a range of 1.4081 to 1.4261.
    The gain for the loonie came despite a drop in the price of
oil. U.S. crude oil futures        settled nearly 8% lower at
$26.08 a barrel after Saudi Arabia and Russia delayed a meeting
to discuss output cuts that could help to reduce global
oversupply.                     
    Canadian government bond yields rose across the curve in
sympathy with U.S. Treasuries. The 10-year was up 4.8 basis
points at 0.761%.
    Canada said it was pressing Washington over a complaint that
U.S. officials had blocked the export of three million face
masks bought by the province of Ontario to fight the coronavirus
outbreak.             

 (Reporting by Fergal Smith; Editing by Steve Orlofsky and David
Gregorio)
  
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