CANADA FX DEBT-C$ tumbles to 3-year low as oil plunge lifts rate cut bets

    * Canadian dollar falls 1.3% against the greenback
    * Loonie hit its weakest since May 2017 at 1.3760
    * Price of U.S. oil slumps by nearly 23%
    * Canada's 10-year yield hits a record low at 0.233%

    By Fergal Smith
    TORONTO, March 9 (Reuters) - The Canadian dollar tumbled to
a near three-year low against its U.S. counterpart on Monday as
investors raised bets on further interest rate cuts from the
Bank of Canada after the price of oil, one of Canada's major
exports, plunged by more than 20%.
    Oil prices lost as much as a third of their value in their
biggest daily rout since the 1991 Gulf War as Saudi Arabia and
Russia signaled they would hike output in a market already awash
with crude after their three-year supply pact collapsed. U.S.
crude oil futures        were down nearly 23% at $31.87 a
barrel.             
    "The collapse in crude pricing has spurred on expectations
of rate cuts by North American central banks," Simon Harvey, FX
market analyst for Monex Europe and Monex Canada, said in a
note.
    "The Canadian economy was already suffering from slowing
economic activity in Q4 2019 before the added risk of the
coronavirus and now a supply side shock to crude markets came
into the picture," Harvey said.
    Money markets see it as likely that the Bank of Canada will
ease in April by 50 basis points, which would match the size of
last week's rate cut.           
    At 9:24 a.m. (1324 GMT), the Canadian dollar          was
trading 1.3% lower at 1.3606 to the greenback, or 73.50 U.S.
cents. The currency touched its weakest intraday level since May
2017 at 1.3760. 
    Canadian housing starts fell 1.9% in February compared with
the previous month as groundbreaking decreased on multiple-unit
urban homes, data from the Canadian Mortgage and Housing
Corporation showed.
    Canadian bond yields tumbled across a flatter yield curve in
sympathy with U.S. Treasuries. The 10-year yield             hit
a record low at 0.233% and was last down 35.5 basis points at
0.373%.

 (Reporting by Fergal Smith; Editing by Will Dunham)
  

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