May 7, 2020 / 1:39 PM / in 3 months

CANADA FX DEBT-C$ rebounds from 2-week low as Chinese data spurs economic optimism

    * Canadian dollar rises 0.5% against the greenback
    * Loonie touches its weakest level since April 23 at 1.4173
    * Price of U.S. oil increases 11.2%
    * Canadian bond yields fall across a flatter curve

    TORONTO, May 7 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Thursday as oil rallied and data
showing an unexpected increase in Chinese exports raised hopes
for the global economy, with the loonie rebounding from an
earlier two-week low.
    World shares          rose as the Chinese data stoked
speculation China could recover from its coronavirus lockdown
quicker than first thought and support global growth in the
process.             
    Canada runs a current account deficit and is a major
exporter of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.
    U.S. crude        prices were up 11.2% at $26.68 a barrel,
boosted by the news on China's exports, as well as U.S. output
cuts and the slow return of activity in Europe.             
    At 9:09 a.m. (1309 GMT), the Canadian dollar          was
trading 0.5% higher at 1.4077 to the greenback, or 71.04 U.S.
cents.
    The loonie earlier touched its weakest intraday level since
April 23 at 1.4173. Since the start of the year the currency has
fallen nearly 8%.
    The Canadian dollar will regain some lost ground over the
coming year along with a potential recovery in the price of oil
and in the global economy after it was crippled by the
coronavirus pandemic, a Reuters poll showed.             
    Canada's jobs report for April is due on Friday and is
expected to show Canadian employment plunged by four million in
April on top of the one million jobs the economy shed in March.
    Canadian bond yields eased across a flatter curve on
Thursday. The 10-year yield             fell 1.7 basis points to
0.597%.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  
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