March 30, 2020 / 7:33 PM / 3 months ago

CANADA FX DEBT-Loonie gives back some of last week's rally as oil prices slide

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar weakens 1.2% against the greenback
    * Price of U.S. oil settles down 6.6%
    * Loonie trades in a range of 1.4000 to 1.4184
    * Canada's 10-year yield rises less than a basis point to
0.744%

    By Fergal Smith
    TORONTO, March 30 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday as the price of oil fell
and the greenback climbed against a basket of major currencies,
with the loonie giving up some of the previous week's sharp
gains.
    At 3:11 p.m. (1911 GMT), the Canadian dollar          was
trading 1.2% lower at 1.4153 to the greenback, or 70.66 U.S.
cents. The currency, which on Friday touched an 11-day high at
1.3922, traded in a range of 1.4000 to 1.4184.
    Last week, the loonie rallied 3.1%, its biggest weekly gain
since October 2009.
    The plunge in oil prices was the "the driving factor" for
the Canadian dollar on Monday, said Mark Chandler, head of
Canadian fixed income and currency strategy at RBC Capital
Markets.
    The market is waiting for news of support from Ottawa for
the oil and gas industry, Chandler added.
    Oil is one of Canada's major exports.      
    U.S. crude oil futures        settled down 6.6% at $20.09 a
barrel, while the U.S. dollar        snapped a week of declines
as investors braced for prolonged uncertainty and governments
tightened lockdowns to fight the coronavirus.
                           
    A Canadian government program to help businesses pay wages
during the coronavirus outbreak applies to all enterprises and
charities with a revenue loss of 30% or more, Prime Minister
Justin Trudeau said.                 
    On Friday, Canada said it would cover 75% of wages for small
businesses and the Bank of Canada cut its key interest rate to
0.25%, the lowest level in a decade, as officials sought to
limit layoffs and bolster an economy hard hit by the coronavirus
pandemic.             
    The central bank also launched its first-ever quantitative
easing program, saying it would buy government and commercial
debt. 
    Canada's 10-year yield             was little changed,
rising by less than 1 basis point to 0.744%.
    Canada's GDP report for January is due on Tuesday.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky and Peter
Cooney)
  
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