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Loonie strengthens as lockdown easing boosts risk appetite

Published 2020-04-27, 03:44 p/m
© Reuters.
USD/CAD
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CL
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CA10YT=RR
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* Canadian dollar rises 0.3% against the greenback

* Loonie trades in a range of 1.4032 to 1.4117

* Price of U.S. oil settles about 25% lower

* Canadian government bond yields rise across the curve

By Fergal Smith

TORONTO, April 27 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday as improved investor sentiment on news that more countries were looking to ease coronavirus-related lockdowns countered a large drop in crude oil prices.

Countries from Italy to New Zealand have announced the easing of lockdown restrictions and the Bank of Japan said it was expanding its stimulus program, helping to boost global stock markets .WORLD . risk sentiment is getting a boost to start the week as traders focus on continued talk of plans to slowly reopen economies around the world," Erik Bregar, head of FX strategy at Exchange Bank of Canada, said in a note.

Canada 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.

At 3:10 p.m. (1910 GMT), the Canadian dollar CAD=D4 was trading 0.3% higher at 1.4042 to the greenback, or 71.21 U.S. cents. The currency, which last week fell 0.8%, traded in a range of 1.4032 to 1.4117.

Canada's death toll from the coronavirus grew by less than 10% for the eighth day in a row, data showed, and Canada's most populous province, Ontario, unveiled guiding principles to restart its economy. crude oil futures CLc1 settled about 25% lower at $12.78 a barrel, driven lower by skittish investors fleeing the U.S. benchmark due to lack of available storage to deal with a coronavirus-induced collapse in demand. government bond yields rose across the curve, with the 10-year CA10YT=RR up 2.7 basis points at 0.609%.

Canada's GDP report for February is due on Thursday but could be too dated to guide expectations for further easing measures from the Bank of Canada.

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