June 4, 2020 / 8:17 PM / 2 months ago

CANADA FX DEBT-C$ sticks near 3-month high as stimulus measures weigh on greenback

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar weakens 0.1% against the greenback
    * Canada posts a trade deficit of C$3.25 billion in April 
    * Price of U.S. oil increases 0.3%
    * Canada's 10-year yield rises 5.8 basis points to 0.675%

    By Fergal Smith
    TORONTO, June 4 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday as stocks fell and
domestic data showed a plunge in exports, but global stimulus
measures helped temper the decline, with the currency holding
near an earlier three-month high.
    The Canadian dollar        was trading 0.1% lower at 1.3508
to the greenback, or 74.03 U.S. cents. The currency touched its
strongest intraday level since March 9 at 1.3468.
    "The CAD is holding near three-month highs largely because
of broad, risk-on, USD sales that came in during the ECB's press
conference this morning," said Erik Bregar, head of FX strategy
at the Exchange Bank of Canada.
    The safe-haven U.S. dollar        fell against a basket of
major currencies after a decision by the European Central Bank
to ramp up an emergency asset-purchase program to shore up
economies hurt by the coronavirus crisis bolstered the euro.    
    Canada's central bank has also launched an asset-purchase
program. It sees reason to be optimistic about the country's
economic recovery but is keeping a close eye on how COVID-19 is
affecting growth and demand in its key export markets, Bank of
Canada Deputy Governor Toni Gravelle said.
    Canada posted a trade deficit of C$3.25 billion in April as
exports fell by nearly 30% to the lowest level in more than 10
years at C$32.7 billion. Analysts had forecast exports would be
C$42.1 billion.
    Wall Street retreated as investors hit the pause button in
advance of Friday's jobs report, while the price of oil       ,
one of Canada's largest exports, settled 0.3% higher.
    The loonie is likely to slip in coming months as a collapse
in global trade and the prospect of a more prolonged slowdown
from the pandemic put pressure on the currency, a Reuters poll
    Canada's 10-year yield             rose 5.8 basis points to
0.675%, its highest since April 15.

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
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