CANADA FX DEBT-C$ snaps 3-day slide on upbeat data, Greece hopes

Wed Mar 7, 2012 4:46pm EST
 
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* C$ ends at C$0.9982 vs US$, or $1.0018
    * Bond prices ease across curve
    * Markets eye BoC Thursday, jobs Friday

    By Claire Sibonney	
    TORONTO, March 7 (Reuters) - The Canadian dollar ended
slightly stronger against the greenback on Wednesday, halting a
three-day slide, after promising U.S. jobs data and better
prospects for Greece's debt deal lifted sentiment. 	
    Major banks and pension funds said they will take part in
Greece's debt swap offer to private creditors, raising the
likelihood that the deal will go through by Thursday and a
bailout package worth 130  billion euros will be secured in a
bid to avert a chaotic default. 	
    Investor confidence also picked up after a report from
payroll processor ADP showed slightly stronger than expected
growth in U.S. private-sector jobs in February, suggesting the
world's biggest economy is gaining traction. 	
    "What you had this week was over-elevated concerns about
Greece. Now the market is taking another look at the U.S.
economy and looking at the long-term strength that we're going
to see in the U.S. and Canadian economies, and that's helped to
boost sentiment," said Adam Button, a currency analyst at
ForexLive in Montreal. 	
    "We have a jobs picture in the U.S. that looks like it's
heading on an upward trajectory and the market is optimistic
that will be confirmed on Friday."	
    The Canadian dollar ended the North American
session at C$0.9982 versus the U.S. dollar, or $1.0018, up from
Tuesday's close on the other side of parity at C$1.0006 against
the U.S. dollar, or 99.94 U.S. cents.	
    Markets also focused on a Wall Street Journal article on
Wednesday that revived hopes the U.S. Federal Reserve would
embark on a third round of quantitative easing.	
    One option that the Fed is considering is the purchase of
more bonds in an effort to hold down borrowing costs, and lend
them out short-term in a bid to hold back inflation, the
newspaper reported. 	
    Apart from Greece and the U.S. and Canadian jobs data,
currency traders were looking ahead to Chinese inflation numbers
on Friday and the Bank of Canada's interest rate decision on
Thursday.	
    The Canadian dollar has lost nearly a cent against the
greenback this month, but global forecasters have raised their
targets for the currency from a month ago and expect it to trade
near parity with the U.S. dollar for much of 2012..	
    "Parity right now is a very poetic spot for the Canadian
dollar to be, because fundamentally we have so many risks that
could be watershed risks in the remainder of the week," added
Button.	
    He said the one big level to watch for in the domestic
currency is support at C$1.0050.	
    Canadian bond prices retreated across the curve as risk
appetite returned.	
    The two-year bond fell 9 Canadian cents to yield
1.124, while the 10-year bond dropped 28 Canadian
cents to yield 1.967 percent.