CANADA FX DEBT-C$ gives up Greece-led gains as greenback firms
(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 session. "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 headlines. "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 Craft)
© Thomson Reuters 2016 All rights reserved.