CANADA FX DEBT-Canadian dollar weakens as oil drops below $50 on spreading coronavirus

    * Canadian dollar dips 0.1% against the greenback
    * Loonie matches Monday's near two-week low at 1.3308
    * Price of U.S. oil decreases 0.5%
    * Canadian bond yields rise across a steeper yield curve

    TORONTO, Feb 26 (Reuters) - The Canadian dollar lost ground
against its broadly stronger U.S. counterpart on Wednesday as
spreading of the coronavirus weighed on the price of oil, one of
Canada's major exports, with the loonie approaching its lowest
level in about two weeks.
    U.S. oil        fell to its lowest level since January 2019
as Asia, Europe and oil-producing countries in the Middle East
reported hundreds of new coronavirus cases and the United States
warned of an inevitable pandemic. U.S. crude oil prices       
were down 0.5% at $49.66 a barrel.                 
    The U.S. dollar        rebounded from a two-week low hit in
the previous session as investors scaled back expectations that
the U.S. Federal Reserve would signal more policy easing in
response to a deadly virus spreading outside China.             
    At 9:19 a.m. (1419 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3294 to the greenback, or 75.22 U.S.
cents. The currency's weakest level of the session was 1.3308,
matching a near two-week low it hit on Monday.
    On Tuesday, protesters in Canada blocked train lines,
Vancouver's port entrance and at least one highway in response
to the arrest of 10 indigenous activists when police dismantled
a rail barricade in southern Ontario a day earlier.             
    Disruptions to rail could add to headwinds for Canada's
economy. Last month, the Bank of Canada opened the door to an
interest rate cut should a recent slowdown in domestic growth
    Canadian government bond yields were higher across a steeper
yield curve in sympathy with U.S. Treasuries as U.S. stock
markets stabilized on Wednesday. The 10-year             was up
2.6 basis points at 1.240%.
    On Monday, the 10-year yield hit a near six-month low at
    Toronto's stock market is set to recoup recent losses and
continue climbing but the coronavirus outbreak and its impact on
global growth could hold back prospects for a steeper uplift in
valuations, a Reuters poll found.             

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)