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

TORONTO (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.

FILE PHOTO: The new Canadian five and 10 dollar bills, made of polymer, are displayed with the previously released 20, 50 and 100 dollar notes following an unveiling ceremony at the Bank of Canada in Ottawa April 30, 2013. REUTERS/Chris Wattie

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 CAD=D4 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 .DXY 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 CLc1 settled unchanged at $19.87 a barrel.

Canadian government bond yields were lower across a flatter curve on Thursday. The 10-year CA10YT=RR 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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