May 6, 2020 / 7:47 PM / 3 months ago

CANADA FX DEBT-Canadian dollar sinks to 2-week low as oil stumbles

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar weakens 0.6% against the greenback
    * Loonie touches a near two-week low at 1.4156
    * Price of U.S. oil decreases 1.8%
    * Canadian bond yields rise across much of a steeper curve

    By Fergal Smith
    TORONTO, May 6 (Reuters) - The Canadian dollar sagged on
Wednesday to a near two-week low against its U.S. counterpart
which staged a broad advance as the price of oil, one of
Canada's major exports, sank, taking some steam out of a recent
rally.
    At 3:24 p.m. (1924 GMT), the Canadian dollar          was
trading 0.6% lower at 1.4118 to the greenback, or 70.83 U.S.
cents. The currency touched its weakest intraday level since
April 23 at 1.4156.
    Much of the Canadian dollar's weakness "came in concert with
oil price declines," said Ronald Simpson, managing director,
global currency analysis at Action Economics. "Further price
declines would appear to be likely, which should continue to
weigh on the CAD."
    U.S. crude oil futures        rose close to a four-week high
early, on hopes for a recovery in demand as some countries ease
coronavirus lockdowns. Then futures slid, down 1.8% to $24.11 a
barrel, as U.S. crude inventories ticked up and gasoline demand
remained below normal seasonal levels.             
    The U.S. dollar        rose as investors sought refuge in
safe-haven currencies in the wake of dire global economic
numbers.             
    U.S. private payrolls data showed a record of more than 20
million jobs lost in April. Canada sends about 75% of its
exports to the United States.                 
    Economists expected Canadian data to show jobs plunged by 4
million in April as non-essential business activity shut down
across the country, adding to a jobs decline of 1 million in
March. The jobs report is due on Friday.     
    Canadian bond yields rose across much of a steeper curve.
The 10-year yield             was up 5 basis points at 0.616%
after the U.S. Treasury Department sharply increased the size of
its long-dated debt auctions to finance its rapidly expanding
deficit.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
David Gregorio)
  
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