April 2, 2020 / 2:31 PM / 2 months ago

CANADA FX DEBT-C$ seesaws as economic impact of coronavirus weighs on sentiment

    * Canadian dollar trades flat against the greenback
    * Price of U.S. oil increases 7.5%
    * Canadian bond yields fall across a flatter curve

    TORONTO, April 2 (Reuters) - The Canadian dollar was
unchanged against its U.S. counterpart on Thursday, with the
loonie trading in a seesaw fashion as a surge in U.S. jobless
claims weighed on investor sentiment, offsetting a rally in oil
prices.
    At 10:15 a.m. (1415 GMT), the Canadian dollar          was
trading unchanged at 1.4195 to the greenback, or 70.45 U.S.
cents. The currency, which has fallen about 8.5% since the start
of the year, traded in a range of 1.4081 to 1.4298.    
    After a sharp decline on Wednesday, stock markets globally
         remained jittery, with data showed the number of
Americans filing claims for unemployment benefits soared to a
record high at more than 6 million as more jurisdictions
enforced stay-at-home measures to curb the coronavirus pandemic.
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    Canada is 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.
    Canada posted a narrower-than-expected trade deficit of
C$983 million in February, data from Statistics Canada showed on
Thursday. Analysts had forecast a deficit of C$1.87 billion.
                
    U.S. crude oil futures        were up 7.5% at $21.84 a
barrel after U.S. President Donald Trump said he expected Saudi
Arabia and Russia to reach a deal soon to end their oil price
war.                 
    A government aid package for struggling Canadian energy
firms has run into weeks of delays, in part because officials
are still trying to obtain up-to-date data, according to three
sources familiar with the matter.              
    Ottawa is rolling out more than C$200 billion in support for
Canada's economy, including direct aid to Canadians, wage
subsidies for businesses, loan programs and tax deferrals, while
the Bank of Canada has slashed interest rates to nearly zero and
is buying government bonds in large quantities, known as
quantitative easing.                                  
    Canadian government bond yields fell across a flatter yield
curve in sympathy with U.S. Treasuries. The 10-year             
was down 4.8 basis points at 0.566%.  

 (Reporting by Fergal Smith
Editing by Marguerita Choy)
  
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