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Canadian dollar seesaws as economic impact of coronavirus weighs on sentiment

Published 2020-04-02, 10:37 a/m
© Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto
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TORONTO (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 <.WORLD> 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.

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 (CLc1) 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.

© Reuters. FILE PHOTO: A Canadian dollar coin, commonly known as the

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%.

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