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The Canadian dollar rose against the greenback on Tuesday in volatile trading to end the first quarter as oil prices rose and data showed the domestic economy grew in January, but the loonie still posted its biggest monthly decline in five years.

The currency strengthened 0.9 per cent to 1.4040 per U.S. dollar, or 71.23 U.S. cents on Tuesday. It traded in a range of 1.4015 to 1.4350.

“We’ve got big month-end and quarter-end flows going through thin markets in the midst of a crisis,” said Michael Goshko, corporate risk manager at Western Union Business Solutions.

Under the circumstances, it was not surprising to see such big swings, he said.

For the month, the loonie weakened 4.6 per cent, its biggest decline since January 2015, and it was down 7.5 per cent for the first quarter.

Canada’s economy gained 0.1 per cent in January, driven largely by higher manufacturing, Statistics Canada data showed on Tuesday.

Still, the economy could be hit particularly hard over the coming months by the coronavirus outbreak. Household debt is at record levels and the price of oil, one of the country’s major exports, has collapsed since January.

In an effort to support the economy, the Bank of Canada has slashed interest rates in a series of emergency moves this month, to 0.25 per cent. It is likely to buy about C$200 billion of government debt after announcing its first quantitative easing program, bond strategists estimate.

U.S. crude oil futures settled 1.9 per cent higher at $20.48 a barrel on Tuesday after U.S. President Donald Trump and Russian counterpart Vladimir Putin agreed to talks on stabilizing energy markets. Still, oil fell 66 per cent in the first quarter.

The U.S. dollar gave up its early gains on Tuesday after initially being supported by quarterly and fiscal year-end demand from portfolio managers and Japanese firms.

Canadian government bond yields fell across a flatter yield curve. The 10-year was down 7.2 basis points at 0.697 per cent.

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