February 27, 2020 / 2:02 PM / 3 months ago

CANADA FX DEBT-Loonie at 6-month low on lower oil prices, virus woes

    * Oil prices fall for fifth day to lowest in a year
    * Canadian govt bond prices rise across the maturity curve

 (New throughout)
    By Saqib Iqbal Ahmed
    Feb 27 (Reuters) - The Canadian dollar edged lower to hit a
fresh six-month low against its U.S. counterpart on Thursday as
oil prices fell for a fifth straight day on a rise in new
coronavirus cases outside China that fueled fears of a pandemic.
    At 8:52 a.m. EST (1352 GMT), the Canadian dollar         
was trading down about 0.02% at 1.3366 to the greenback, or
74.82 U.S. cents.
    Oil prices fell nearly 3% on Thursday to their lowest since
January 2019 as rising new coronavirus cases outside China
fueled fears of a pandemic that could slow the global economy
and dent demand for crude. Oil is one of Canada's major
exports.            
    The number of new infections in China - the source of the
epidemic - was for the first time overtaken by new cases
elsewhere on Wednesday, raising fears that the outbreak could
become a pandemic.                 
    Asia reported hundreds of new cases, Brazil confirmed Latin
America's first infection and the new disease - COVID-19 - was
also detected for the first time in Pakistan, Sweden, Norway,
Greece, Romania and Algeria. 
    "While U.S.-Canadian interest rate differentials continue to
move against the U.S. dollar, weaker crude oil prices are a
clear headwind for the Canadian dollar," Shaun Osborne, chief FX
strategist at Scotiabank in Toronto, said in a note.
    Canada's current account deficit narrowed to C$8.76 billion
($6.56 billion) in the fourth quarter from a revised C$10.86
billion deficit in the third quarter, on a lower trade deficit
on goods, Statistics Canada said on Thursday.             
    Canadian government bond prices rose across the maturity
curve, with the two-year            price up 0.111 Canadian cent
to yield 1.264% and the benchmark 10-year             rising
0.632 Canadian cents to yield 1.15%.

 (Reporting by Saqib Iqbal Ahmed
Editing by Nick Zieminski)
  
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