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Canadian dollar recovers from 11-day low as oil rallies

Published 2020-05-04, 09:46 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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By Fergal Smith

TORONTO (Reuters) - The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Monday, with the loonie rebounding from an earlier 11-day low as oil rallied.

The U.S. dollar (DXY) was bolstered by safe-haven flows as risk appetite waned amid fears that last year's U.S.-China dispute will be reignited, this time over the novel coronavirus.

"Despite a stronger U.S. dollar today versus most major currencies, the Canadian dollar stands out as the exception," said Michael Goshko, corporate risk manager at Western Union Business Solutions. "The currency is being helped by oil's recent strength."

U.S. crude oil futures (CLc1) gained 7.7% to $21.30 a barrel as more countries announced they would begin easing coronavirus lockdowns and as crude supply cuts by the world's top producing nations and companies take hold.

The major Canadian province of Quebec, worst hit by the coronavirus, gradually began reopening its economy on Monday but pushed back plans for a restart in the city of Montreal, citing health concerns.

The Canadian dollar was trading nearly unchanged at 1.4087 to the greenback, or 70.99 U.S. cents. The currency touched its weakest intraday level since April 23 at 1.4151.

Canada's central bank will do its part to help bridge the economy through the coronavirus outbreak while standing ready to adjust its asset purchases to support a lasting recovery, Bank of Canada Senior Deputy Governor Carolyn Wilkins said.

Wilkins was widely seen as the front-runner to become the next governor of the central bank but lost out to Tiff Macklem, a former senior deputy governor, when the appointment was announced on Friday.

Canadian government bond yields were mixed across a steeper yield curve on Monday, with the 10-year (CA10YT=RR) up 4.9 basis points at 0.574%.

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

Canada's trade report for March is due on Tuesday, while the April employment report is due on Friday.

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