CANADA FX DEBT-C$ firms on Greece, U.S. optimism

Wed Mar 21, 2012 9:08am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* C$ at C$0.9910 vs US$, or $1.0090
    * Greece, U.S. economy hopes boost sentiment
    * Bond prices higher across curve

    By Jon Cook	
    TORONTO, March 21 (Reuters) - The resource-linked Canadian
dollar firmed against the U.S. currency on Wednesday after
Greece's lawmakers approved a second bailout deal and investors
looked to further signs of U.S. economic strength to help ease
concerns about China.	
    Canada's dollar got an overnight bounce after Athens rubber
stamped a second 130 billion euro ($172.15 billion) rescue,
previously approved by the International Monetary Fund and
Greece's euro zone partners, to keep the debt-choked country
afloat through 2014.       	
   "We received 5.9 billion euros from the euro zone and 1.6
billion euros from the IMF," a finance ministry official told
    The news helped the Canadian dollar rebound after worries
about a slowdown in demand from top metals consumer China pushed
the currency to a near two-week low on Wednesday.
    "We had a nasty run up yesterday that probably cleansed a
few shorts out," said Steve Butler, a director of foreign
exchange trading at Scotia Capital. "Risk is back on this
morning and Canada is looking good."	
    At 8:35 a.m. (1235 GMT), the Canadian dollar was at
C$0.9910 versus the U.S. dollar, or $1.0090, up slightly from
Tuesday's North American session close at C$0.9918 versus the
U.S. dollar, or $1.0083.	
    Markets awaited U.S. February existing home sales figures
due at 10 a.m. (1400 GMT) for signs excess inventory in the
housing market is diminishing. Economists in a Reuters survey
forecast a rise to 4.62 million unit sales from 4.57 million in
    "A slightly better number will continue to keep the
motivation that the U.S. economy has really turned the corner,"
said Butler.	
    He added that continued signs of U.S. strength could force
U.S. Federal Reserve Chairman Ben Bernanke to start raising the
central bank's key interest rate before the 2014 target he
mentioned back in January.	
    On Tuesday, the president of the Minneapolis Federal Reserve
Bank said he could see an argument for initiating rate increases
as soon as this year. 	
    The slow grind upward of the economy in the U.S. - Canada's
largest trading partner - has helped the Canadian dollar
outperform most global currencies in recent weeks. On Wednesday
it continued that trend, gaining against other
commodity-weighted currencies such as the Australian and New
Zealand dollars.	
    An improvement in risk sentiment pushed Canadian bond prices
higher across the curve. The two-year bond was up 2
Canadian cents to yield 1.283 percent. The 10-year bond
 rose 3 Canadian cents to yield 2.279 percent.