CANADA FX DEBT-C$ pares early losses on Greek deal hopes

Tue Feb 7, 2012 9:42am EST
 
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(Adds details, analyst's comments)

* C$ at C$0.9960 to the US$, or $1.0040

* Greek debt deal progress lifts market

* Bond prices mostly lower

By Jon Cook

TORONTO, Feb 7 (Reuters) - The Canadian dollar pared losses against its U.S. counterpart on Tuesday morning and looked set to move higher after a Greek official said Athens is drafting a bailout agreement to be placed before political leaders for approval later in the day.

Greece has been in talks to come to terms on new austerity measures demanded by the European Union in return for another bailout, which needs to be approved by Feb. 15 if the money is to be available in time for Athens to meet a 14.5 billion euro ($18.96 billion) bond redemption in March.

In the absence of a signed deal, investors have been hesitant to throw their money into riskier commodity-linked currencies such as the Canadian dollar.

"We're seeing sideways trade here," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.   Continued...