April 16, 2020 / 8:04 PM / a month ago

CANADA FX DEBT-C$ recovers from 10-day low as Ottawa adds to economic support

 (Adds strategist quotes and details throughout, updates prices)
    * Canada sheds 177,300 payroll jobs in March
    * Canadian factory sales increase by 0.5% in February 
    * Canada's 10-year yield touches a 2-week low at 0.563%

    By Fergal Smith
    TORONTO, April 16 (Reuters) - The Canadian dollar recovered
from an earlier 10-day low to end little changed against its
broadly stronger U.S. counterpart on Thursday, as Canadian Prime
Minister Justin Trudeau announced additional economic support
measures.
    Trudeau said Ottawa would expand loans to firms that paid
between C$20,000 and C$1.5 million in total payroll in 2019, and
also planned to help commercial property owners cut or even
forgive rent to small businesses, the latest in a series of
measures to ease the economic impact of the coronavirus
outbreak.             
    Ottawa is rolling out more than C$200 billion in measures to
support the economy, while the Bank of Canada has slashed
interest rates by 150 basis points since March and begun buying
Canadian government bonds.
    On Wednesday, the central bank said it would broaden its
asset-purchase, or quantitative easing, program to include
provincial and corporate debt.             
    "Everyone is struggling right now to understand how
effective government and central bank programs will be," said
Adam Button, chief currency analyst at ForexLive. "Canada has
been particularly aggressive in buffering the pain from the
coronavirus and at some point that will pay dividends."    
    At 3:25 p.m. (1925 GMT), the Canadian dollar          was
trading nearly unchanged at 1.4115 to the greenback, or 70.85
U.S. cents. The currency earlier touched its weakest intraday
level since April 6 at 1.4182.
    The U.S. dollar        notched a one-week high against a
basket of major currencies as investors fled to safe-haven
assets following the release of weekly U.S. jobless data showing
a record 22 million Americans had sought unemployment benefits
in the past month.             
    Canada lost 177,300 jobs in March as the coronavirus
pandemic ripped through the economy, a report from payroll
services provider ADP showed.
    Separate data from Statistics Canada showed that factory
sales increased by 0.5% in February from January on higher sales
in motor vehicle assembly, as well as plastics and rubber
products.                 
    The price of oil, one of Canada's major exports, stayed near
an 18-year low after OPEC lowered its global oil demand forecast
due to the plunge in demand delivered by the coronavirus
outbreak. U.S. crude oil futures        settled unchanged at
$19.87 a barrel.                 
    Canadian government bond yields were lower across a flatter
curve on Thursday. The 10-year             fell 3.5 basis points
to 0.607%, having touched its lowest intraday since April 2 at
0.563%.

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