CANADA FX DEBT-C$ gives up Greece-led gains as greenback firms

Mon Jun 22, 2015 5:03pm EDT
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(Updates with details, commentary, closing figures)
    * Canadian dollar at C$1.2326 or 81.13 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, June 22 (Reuters) - The Canadian dollar finished
weaker against a firmer greenback on Monday as earlier gains,
driven by optimism that Greece and its creditors were on their
way to a breakthrough debt deal, faded.
    The U.S. dollar advanced nearly 0.3 percent against a basket
of currencies, and the Canadian dollar, which had been
outperforming its counterparts on Monday, ended broadly weaker.
    Prices for oil, a key Canadian export, were little changed
after an earlier rise had helped strengthened the loonie.
    The Canadian dollar was at C$1.2250 to the
greenback, or 81.63 U.S. cents, firmer than the Bank of Canada's
official close of C$1.2266, or 81.53 U.S. cents, on Friday. The
loonie had traded between C$1.2218 and C$1.2329 during the
    "The move seemed relatively outsized given how some of the
other independent factors have moved," said Bipan Rai, director
of foreign exchange strategy, CIBC World Markets, but noted that
Canadian yields were underperforming U.S. yields.
    "But at these levels, it's not really something to get too
excited about in the near term. In fact, we do see the
possibility of another round of weakness for the U.S. dollar
that should offer potentially more attractive levels for
investors to get long-USD/CAD."
    With no domestic data to drive the currency, and only
second-tier data from the United States this week, market focus
and sentiment will likely remain driven in large part by Greek
    "We're in a consolidative environment at least until the
second half of July," said Rai. 
    Canadian government bond prices were mixed across the
maturity curve, with longer-term bonds falling. The two-year
 price was down 6.5 Canadian cents to yield 0.625
percent and the benchmark 10-year fell 86 Canadian
cents to yield 1.807 percent.
    The Canada-U.S. two-year bond spread was -3.70 basis points,
while the 10-year spread was -56.7 basis points.

 (Reporting by Solarina Ho; Editing by Peter Galloway and Diane