March 31, 2020 / 3:59 PM / 2 months ago

CANADA FX DEBT-Canadian dollar rises with oil but set for big monthly decline

    * Canadian dollar rises 0.3% against the greenback
    * Price of U.S. oil increases 2.4%
    * For the month, the loonie is down 5.1%
    * Canadian bond yields fall across the curve

    TORONTO, March 31 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday as oil prices
rose and domestic data showed the economy grew in January, but
the loonie was on track for its biggest monthly decline in more
than five years.
    U.S. crude oil futures        were up 2.4% at $20.58 a
barrel on Tuesday after U.S. President Donald Trump and Russian
counterpart Vladimir Putin agreed to talks on stabilizing energy
markets.             
    Canada's economy gained 0.1% in January, driven largely by
higher manufacturing, Statistics Canada data showed.
            
    Still, Canada's economy could be hit particularly hard over
the coming months by the coronavirus outbreak. Household debt is
at record levels and the price of oil       , one of the
country's major exports, has collapsed since January.
    In an effort to support the economy, the Bank of Canada has
slashed interest rates in a series of emergency moves this
month, to 0.25%. It is likely to buy about C$200 billion of
government debt after announcing its first quantitative easing
program, bond strategists estimate.             
    At 11:47 a.m. (1547 GMT), the Canadian dollar          was
trading 0.3% higher at 1.4119 to the greenback, or 70.83 U.S.
cents. The loonie traded in a range of 1.4095 to 1.4350.
    For the month, the loonie was down 5.1%, its biggest decline
since January 2015.
    The U.S. dollar        gave up its earlier gains after
initially being supported by quarterly and fiscal year-end
demand from portfolio managers and Japanese firms.             
    Canadian government bond yields fell across a flatter yield
curve. The 10-year             was down 7 basis points at
0.699%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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