* Canadian dollar weakens 1.3% against the greenback * Canadian CPI rises 2.2% year-over-year in February * Price of U.S. oil decreases 9% * Canadian bond yields were mixed across a steeper curve By Fergal Smith TORONTO, March 18 (Reuters) - The Canadian dollar weakened to a four-year low against the greenback on Wednesday as oil prices tumbled and investors awaited potential stimulus from Ottawa and the Bank of Canada to ease the economic impact of the coronavirus outbreak. Bank of Canada Governor Stephen Poloz and Canadian Finance Minister Bill Morneau will announce support for those affected by the virus, the finance ministry said. The two men will hold a news conference at 11.15 a.m. (1515 GMT). "We expect the Bank will be announcing a reduction in interest rates to the effective lower bound in conjunction with a stimulus package from Minister Morneau," said Royce Mendes, a senior economist at CIBC Capital Markets. Canada will unveil a C$27 billion aid package to help overcome the effects of a worsening coronavirus outbreak that Ottawa says could last for months, a government source said on Tuesday. At 9:13 a.m. (1313 GMT), the Canadian dollar was trading 1.3% lower at 1.4394 to the greenback, or 69.47 U.S. cents. The currency touched its weakest intraday level since January 2016 at 1.4408. Canada and the United States are working on a deal to close their joint border to non-essential travel as part of the fight against a coronavirus outbreak, a Canadian government source said. The price of oil, one of Canada's major exports, fell to a 17-year low as travel and social lockdowns sparked by the coronavirus epidemic knocked the outlook for demand. U.S. crude oil futures were down 9% at $24.52 a barrel. Global stocks stumbled back into the red as fears over the coronavirus fallout eclipsed large-scale support measures rolled out by policymakers around the globe. Canadian government bond yields were mixed across a steeper yield curve in sympathy with U.S. Treasuries as investors braced for increased fiscal spending. The 2-year yield fell 6.7 basis points to 0.587%, while the 10-year yield was up 3 basis points at 0.986%. Canada's consumer price index rose by 2.2% year-over-year in February, down from 2.4% in January, Statistics Canada said. The average of the Bank of Canada's three core measures was steady at 2.0%. (Reporting by Fergal Smith Editing by Nick Zieminski)
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