Loonie extends first-quarter decline as virus fears weigh

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TORONTO — The Canadian dollar weakened

against its U.S. counterpart on Wednesday, adding to a sharp

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Loonie extends first-quarter decline as virus fears weigh Back to video

first-quarter decline, as the economic threat of the spreading

coronavirus pandemic weighed on global financial markets.

Canada runs a current account deficit and is a major

exporter of commodities, including oil, so the loonie tends to

be sensitive to the flow of global trade and capital.

U.S. stock index futures sank as stark predictions of a rise

in the U.S. death toll from the virus and worsening economic

damage from the coronavirus pandemic led investors to ditch

equities for safe-haven assets.

U.S. crude oil futures were down 0.2% at $20.43 a

barrel, trading near their lowest in 18 years, as a report

showing a big rise in U.S. inventories and a widening rift

within OPEC heightened oversupply concerns.

At 9:11 a.m. (1311 GMT), the Canadian dollar was

trading 1.1% lower at 1.4226 to the greenback, or 70.29 U.S.

cents. The currency traded in a range of 1.4065 to 1.4272.

In March, the loonie declined 4.7%, while it was down 7.6%

for the first quarter.

Canada’s death toll from the coronavirus outbreak jumped by

35% to 89 in less than a day, officials said on Tuesday, and the

major province of Quebec said it was running low on key medical

equipment.

In an effort to support the economy during the pandemic, the

Bank of Canada has slashed interest rates to 0.25% and plans to

engage in large-scale asset purchases, quantitative easing,

while Ottawa has announced C$95 billion in aid.

Canadian government bond yields fell across a flatter curve,

with the 10-year down 8.6 basis points at 0.609%.

Last month, the 10-year yield hit a record low at 0.233%.

(Reporting by Fergal Smith; Editing by Steve Orlofsky)