February 4, 2020 / 2:14 PM / 18 days ago

CANADA FX DEBT-Canadian dollar steadies near 2-month low as China adds liquidity

    * Canadian dollar rises 0.1% against the greenback
    * Loonie trades in a range of 1.3268 to 1.3301 
    * Price of U.S. oil increases 2.6%
    * Canadian bond yields rise across a steeper yield curve

    TORONTO, Feb 4 (Reuters) - The Canadian dollar edged higher
against the greenback on Tuesday as intervention by China's
central bank tempered concern about the economic impact of the
coronavirus outbreak, with the loonie steadying after it hit a
two-month low the day before.
    Stocks          rallied globally after the People's Bank of
China injected liquidity into money markets, while the price of
oil, one of Canada's major exports, rallied on hopes for new
output curbs from OPEC and its allies to offset any potential
drop in demand triggered by the virus. U.S. crude oil futures
       were up 2.6% at $51.41 a barrel.                         
    At 8:52 a.m. (1352 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3279 to the greenback, or 75.31 U.S.
cents. The currency, which hit a two-month low on Monday at
1.3302, traded in a range of 1.3268 to 1.3301.    
    Trade confidence among Canadian exporters fell to its lowest
level in nearly a decade, Canada's export credit agency said, as
businesses wrestle with protectionist policies and fret about
the global economy.             
    Canadian trade data for December is due on Wednesday and the
January jobs report is awaited on Friday, both of which could
guide expectations for the Bank of Canada interest rate outlook.
    Last month, the Canadian central bank left the door open to
an interest rate cut should a recent slowdown in domestic growth
persist. Money markets see about a 60% chance that it will ease
by April.                
    Canadian government bond yields rose across a steeper yield
curve, with the 10-year yield             rising 5.2 basis
points to 1.310%. On Monday, it hit its lowest intraday level in
nearly four months at 1.252%.      

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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