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CANADA FX DEBT-Canadian dollar outshines G10 peers as Ottawa adds to economic support

 (Adds market player quotes and details, updates prices)
    * Canadian dollar rises 0.3% against the greenback
    * Loonie touches a seven-week low at 1.3417
    * Price of U.S. oil settles nearly 1% higher
    * Canada's 10-year yield was little changed at 0.557%

    By Fergal Smith
    TORONTO, Sept 24 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Thursday as oil
prices rose and Ottawa raised support for the unemployed, with
the loonie bouncing back from an earlier seven-week low, which
it hit as investors weighed rising coronavirus cases.
    U.S. crude oil futures        settled nearly 1% higher at
$40.31 a barrel as a drop in U.S. crude inventories offset
worries a new wave of coronavirus cases in Europe could hurt the
outlook for demand.
    Investors have had to reduce their expectations for the
speed of economic recovery, but "I don't think we are going to
see the type of (market) panic that we saw last spring in any
way, shape or form," said Brad Meiers, head of debt capital
markets and syndication at HSBC Securities (Canada) Inc.
    "The markets are comforted by the fact that there are no
governments saying 'OK, our job is done.' Clearly, they all
realize it is not done yet," Meiers said.
    Canada's government boosted a proposed weekly payout for the
jobless that would replace emergency COVID-19 income support
that ends this weekend, a move that looks set to help the ruling
Liberals win a parliamentary confidence vote.             
    Ottawa's vow to double down on pandemic-related spending
will support activity but raises questions over the burgeoning
deficit, economists say.             
    The Canadian dollar        was trading 0.3% higher at 1.3349
to the greenback, or 74.91 U.S. cents, which was the biggest
gain among G10 currencies. Earlier, the currency touched its
weakest level since Aug. 4 at 1.3417.
    Wall Street rallied in a rocky session on Thursday as
beaten-down technology shares gained favor after data showing a
surge in the sale of new homes revived faith in the economic
recovery even as U.S. jobless claims rose
unexpectedly.            
    Canadian government bond yields were little changed across
the curve, with the 10-year             trading at 0.557%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky and
Jonathan Oatis)
  
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