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Canadian dollar gains as oil settles about 20% higher

Published 2020-04-23, 04:21 p/m
© Reuters.
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* Canadian dollar rises 0.7% against the greenback

* Price of U.S. oil increases by nearly 20%

* Loonie trades in a range of 1.40 to 1.4200

* Canadian bond yields trade mixed across a flatter curve

By Fergal Smith

TORONTO, April 23 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday as investor sentiment got a boost from higher prices for crude oil, one of Canada's major exports, and the prospect of further economic stimulus.

At 3:49 p.m. (1949 GMT), the Canadian dollar CAD=D4 was trading 0.7% higher at 1.4060 to the greenback, or 71.12 U.S. cents. The currency, which on Tuesday hit a near three-week low at 1.4263, traded in a range of 1.40 to 1.42.

The loonie is benefiting from a pickup in global market sentiment, said Simon Harvey, FX market analyst for Monex Europe and Monex Canada.

World stock markets .WORLD edged higher as investors weighed a rebound in oil prices and prospects for more government stimulus, although gains were crimped by a report that an experimental antiviral drug for the coronavirus flopped in its first randomized clinical trial. crude oil futures CLc1 settled 19.7% higher at $16.50 a barrel, spurred by the promise of more government stimulus, as well as rising tensions in the Middle East and output cuts by producing nations to tackle oversupply. oil industry still sits in a state of ruins in Canada at present prices," Harvey said. "Even a substantial pickup in crude ... will still leave the industry's prior investment plans in tatters."

Canada's export credit agency said on Wednesday it would backstop loans to hard-hit oil and gas producers, in the latest move by Ottawa to free up credit for the energy industry. is rolling out more than C$200 billion ($142 billion) in measures to support Canada's economy, while the Bank of Canada has slashed interest rates by 150 basis points since March and begun buying Government of Canada bonds.

Potential Bank of Canada governor candidate Jean Boivin plans to stay at BlackRock Inc (NYSE:BLK) BLK.N , a spokeswoman for the global investment manager said. government bond yields were mixed across a flatter curve on Thursday. The 10-year CA10YT=RR eased 2.3 basis points to 0.593%. ($1 = 1.4069 Canadian dollars)

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