February 9, 2012 / 2:48 PM / 6 years ago

CANADA FX DEBT-C$ hits 2012 high on Greek deal

* C$ rises to C$0.9925, or $1.0076

* Supported by news Greek deal has been reached

* Shrugs off domestic Dec home prices data

* Bond yields hit 2012 highs

By Jennifer Kwan

TORONTO, Feb 9 (Reuters) - Canada’s dollar strengthened to a 2012 high against its U.S. counterpart on Thursday on firmer oil prices and as investors sought riskier assets on news a Greek bailout package had been reached.

European stocks and the euro bounced higher after European Central Bank President Mario Draghi confirmed that Greece had clinched a deal for emergency aid needed to avoid a disorderly default.

“It’s relative optimism coming from Greece. We don’t know what the details are, but the agreement has apparently been reached,” said Jack Spitz, managing director of foreign exchange at National Bank.

“That would attract some investor confidence to the market and should give the euro a bit of a boost, and it’s actually also attracting some offers into the U.S. dollar.”

The Canadian dollar firmed to C$0.9925 to the U.S. currency, or $1.0076, up from Wednesday’s close at C$0.9961 to the U.S. dollar, or $1.0039. It was the currency’s highest level since Oct. 31.

Spitz had said he expected Canadian dollar resistance at around C$0.9928 to C$0.9935 against the U.S. dollar, followed by C$0.9892, which is the late October high. Support should come in at around C$0.9980 and parity, he added.

The currency also drew support from firmer oil prices, a key Canadian export. Oil futures gained on news Greek political leaders had clinched a deal on austerity and as data showed U.S. weekly jobless claims dipped.

The currency showed little reaction to domestic home prices data, which showed the pace of growth in new home prices slowed in December compared to the previous month in a sign the hot housing market may be cooling.

BOND YIELDS HIT 2012 HIGHS

Canadian government bond prices were mostly lower, following moves in the U.S. Treasury market that added to earlier losses as the jobs data hinted at further improvement in the labor market, denting the appeal of safe-haven government bonds.

The two-year bond slipped 5 Canadian cents to yield 1.103 percent. The 10-year bond fell 47 Canadian cents and to yield 2.118 percent. It hit a 2012 high of 2.135. (Editing by Jeffrey Hodgson)

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