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The Canadian dollar weakened against its U.S. counterpart on Wednesday, adding to a sharp 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.

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U.S. crude oil futures were down 0.2 per cent 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., the Canadian dollar was trading 1.1 per cent 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 per cent, while it was down 7.6 per cent for the first quarter.

Canada’s death toll from the coronavirus outbreak jumped by 35 per cent 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 per cent and plans to engage in large-scale asset purchases, quantitative easing, while Ottawa has announced $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 per cent. Last month, the 10-year yield hit a record low at 0.233 per cent.

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