TSX extends weekly decline, loonie rally ebbs

Canada's main stock market fell and the loonie gave back much of its earlier gains on Friday, with both down sharply for the week, as global efforts to contain the spread of the coronavirus pandemic weighed on the economic outlook.
New York and California imposed tough new restrictions, limiting the activity of 60 million people in the two states to curb the spread of the virus, while Canadian Prime Minister Justin Trudeau said that he expected the closure of the US-Canada border to take effect overnight.
Canada is set to ramp up borrowing as Ottawa's C$27 billion stimulus package, announced this week to stave off a potential recession, blows out the fiscal deficit, market strategists said.
The Toronto Stock Exchange's S&P/TSX composite index closed down 2.6% at 11,851.56. For the week, the index was down 13.6%, its fifth straight weekly decline.
The materials group shed 5.7% on Friday as shares of gold miners declined, while the heavily weighted financials sector was down 3.6%.
Six major central banks announced a coordinated action to enhance liquidity in the US dollar by increasing the frequency of their currency swap operations. That initially helped the loonie but the pause in the scramble for the greenback was short-lived.
The Canadian dollar strengthened 0.7% to 1.4414 per US dollar, or 69.38 US cents. The currency, which on Thursday hit a four-year low at 1.4669, traded in a range of 1.4150 to 1.4538.
For the week, the loonie was down 4.2%, its biggest decline since September 2011.
The price of oil, one of Canada's major exports, fell as global demand dried up due to the virus. US crude oil futures settled 10.7% lower at $22.53 a barrel.
Speculators have raised their bearish bets on the Canadian dollar, data from the US Commodity Futures Trading Commission showed.
Canadian government bond yields fell across a flatter yield curve in sympathy with US Treasuries. The 10-year yield was down 11.6 basis points at 0.882%. Canadian retail sales grew by 0.4% in January from December, Statistics Canada said. Analysts had forecast a 0.3% increase.