(Adds strategist quotes and details throughout; updates prices)
* Canadian dollar slides 0.7% against the greenback
* Loonie touches its weakest level since April 13 at 1.2623
* Price of U.S. oil settles 1.5% lower
* Canada's 10-year yield eases 4.5 basis points to 1.510%
By Fergal Smith
TORONTO, April 20 (Reuters) - The Canadian dollar weakened
to a one-week low against its U.S. counterpart on Tuesday as
rising global COVID-19 cases weighed on oil and global equity
markets, while investors awaited a Bank of Canada interest rate
decision.
The loonie was trading 0.7% lower at 1.2620 to the
greenback, or 79.24 U.S. cents, its largest decline since Feb.
26. It hit its weakest intraday level since April 13 at 1.2623.
"The Canadian dollar has retraced early gains to join
commodity currencies in trading lower as its relationship with
oil snaps back into the limelight," said Simon Harvey, senior FX
market analyst for Monex Europe and Monex Canada.
The price of oil, one of Canada's major exports, pulled back
from one-month highs on fears that India, the world's
third-biggest oil importer, may impose restrictions as
coronavirus infections soar.
U.S. crude oil futures settled 1.5% lower at $62.44 a
barrel, while Wall Street's main indexes fell for a second
straight day.
Among G10 currencies, only the Norwegian crown fared
worse than the loonie. Norway is also a major oil producer.
On Monday, Canada's federal budget projected billions in new
spending to provide emergency support during a third wave of the
pandemic.
"The new spending is an upside to growth and could lead to
the Bank of Canada raising rates earlier or faster than
otherwise," Adam Cole, chief currency strategist at RBC Capital
Markets in London, said in a note.
Canada's central bank has signaled it would leave interest
rates at a record low level of 0.25% until 2023. It is due on
Wednesday to update its economic forecasts and could cut the
pace of bond purchases.
Canadian government bond yields eased across a flatter
curve. The 10-year fell 4.5 basis points to 1.510%,
pulling back from an earlier three-week high at 1.586%.
(Reporting by Fergal Smith
Editing by Bernadette Baum and Marguerita Choy)
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