CANADA FX DEBT-C$ jumps on global central bank talk

Thu Jun 14, 2012 4:22pm EDT
 
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* C$ ends up at C$1.0238 vs US$, or 97.68 U.S. cents
    * Bond prices ease across the curve

    By Claire Sibonney	
    TORONTO, June 14 (Reuters) - The Canadian dollar rallied
against the U.S. dollar on Thursday after G20 officials told
Reuters that central banks are ready to provide liquidity if
needed should the outcome of Greek elections on Sunday cause
tumultuous trading.	
    News that policymakers are on standby to ensure enough cash
is flowing through the financial system in the event of market
mayhem soothed investors ahead of an unusual confluence of three
elections this weekend, including important polls in Egypt and
France. 	
    As a result, U.S. stocks - a key barometer of global risk
appetite - also ended higher as Wall Street continued its
roller-coaster ride ahead of the cliffhanger Greek vote. 	
    "The immediate worst-case scenario is if we get a decisive
(Greek leftist party) Syriza majority following the election and
a lot of the anti-bailout rhetoric becomes solidified and we
find we're at a stalemate between the Greek governments and
policymakers," said David Tulk, chief Canada macro strategist at
TD Securities.	
    "(Markets are) worried that if Greece is the finger stuck in
the dam, if you take out that finger, the rest of the euro zone
will collapse with fear translating very quickly to Spain and to
Italy and to Ireland."	
    Canada's dollar ended the North American session at
C$1.0238, or 97.68 U.S. cents, stronger than Wednesday's finish
at C$1.0292, or 97.16 U.S. cents. 	
    The domestic currency hit an intraday high of C$1.0230, or
97.75 U.S. cents, its strongest level since Monday.	
    Adam Cole, global head of foreign exchange strategy at RBC
Capital Markets in London, cautioned that the result of the
Greek elections is too difficult for investors to call.	
    "The outcomes (are) potentially so polar in terms of what
they imply for markets. It's something that's very, very hard to
position for."	
    Canada's bond prices extended losses as risk assets advanced
in response to headlines on the G20 response to euro zone fears.	
    Canada's two-year bond was off 2 Canadian cents
to yield 1.037 percent, while the benchmark 10-year bond
 fell 22 Canadian cents, yielding 1.791 percent.