CANADA FX DEBT-C$ firms on Greek hopes

Thu Mar 8, 2012 8:03am EST
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* C$ up at C$0.9953 vs US$, or US$1.0047
    * Greek bond swap hopes boost sentiment
    * Bond prices mostly lower

    By Jon Cook	
    TORONTO, March 8 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Thursday on
indications that major European banks and pension funds are
likely to take part in the Greek bond swap deal, easing concerns
about a chaotic default.	
    However, markets are expected to remain cautious ahead of
the formal announcement on the Greek deal, as well as Friday's
keenly watched U.S. jobs report, while the Bank of Canada and
other central banks are being closely monitored for signs they
will keep promoting growth.  	
    "It looks like the market is getting more and more
optimistic that the bond swap is going to get done without too
much pain and that's put the market in risk-on mode," said Steve
Butler, a director of foreign exchange trading at Scotia
    At 7:45 a.m. (1245 GMT), the Canadian dollar stood
at C$0.9953 against the greenback, or $1.0047, up from
Wednesday's North American session close at C$0.9982 versus the
U.S. dollar, or $1.0018. 	
    Canada's commodities-reliant currency was supported by a
rise in oil on Thursday, with prices topping $125 a barrel after
a Greek government official said its bond swap offer was going
well as banks and funds showed support. 	
    Later on Thursday, Bank of Canada Governor Mark Carney will
report results from the central bank's policy meeting, where it
is expected to keep the overnight interest rate at its current 1
    "That's the expectations, but I've heard some very mild
chatter that we might see a slightly less dovish statement from
the Bank," said Butler. "It all really hinges upon that because
we all know there's going to be no movement in rates today."	
    Canadian housing data released on Thursday was not expected
to move the currency. 	
    Butler said the Canadian currency should find support at
C$0.9990 and resistance at C$0.9920, but added a good Greek
result and solid U.S. jobs numbers could move the currency back
towards last week's high at C$0.9842.	
    Canadian bond prices were mostly lower, with the two-year
bond unchanged at a yield of 1.125, while the 10-year
bond dropped 5 Canadian cents to yield 1.974