CANADA FX DEBT-C$ climbs on renewed risk appetite, optimism
* Canadian dollar touches high of 97.16 U.S. cents
* Bond prices rise on risk play (Updates to midmorning, adds quotes)
By Jennifer Kwan
TORONTO, July 13 (Reuters) - The Canadian dollar touched its highest level in nearly three weeks on Tuesday, following domestic trade data that highlighted strength in business and consumer demand, and a successful Greek auction that eased worries about euro-zone debt.
The Canadian dollar touched a high of C$1.0292 to the U.S. dollar, or 97.16 U.S. cents, its highest level since June 23, bolstered by rallying global equity markets after Greece successfully returned to capital markets for the first time since late April. [MKTS/GLOB]
Athens sold 1.625 billion euros of six-month treasury bills, passing its first borrowing test since securing a 110 billion euro emergency funding deal in May. [ID:nLDE66C0DH]
As well, domestic data showed that strong demand from Canadian businesses and consumers triggered a surge in imports in May that outpaced exports, leading to the third consecutive monthly trade deficit. [ID:nN13232203]
"The expectation was that it would be flat and the prior number was revised lower, so wider, and that has negative implications for GDP," said Camilla Sutton, currency strategist at Scotia Capital.
"But when you look at the details the imports were very strong, which is also good sign there's ongoing demand."
At 10:17 a.m. (1417 GMT), the Canadian dollar CAD=D4 was at C$1.0314 to the U.S. dollar, or 96.96 U.S. cents, up from Monday's finish at C$1.0375 to the U.S. dollar, or 96.39 U.S. cents.
Increased risk appetite saw global equities advance on earnings optimism, while the oil price rose above $76 a barrel on optimism for the economic recovery and stronger demand. [MKTS/GLOB] [O/R]
"The risk mode is risk-on," said Sutton, who noted that a softer U.S. dollar was also helping Canada's currency strengthen. [FRX/]
Adam Cole, global head of FX strategy at RBC Capital Markets, said the Canadian dollar was trapped in the range of C$1.0300 to C$1.0420 to the U.S. dollar for now, and a break of either side would determine the directional bias.
BONDS FALL AS STOCKS RALLY
Canadian bond prices fell across the curve as investors flocked to higher-yielding assets following Greece's debt sale. [US/]
The two-year bond CA2YT=RR sagged 5 Canadian cents to yield 1.709 percent, while the 10-year bond CA10YT=RR shed 40 Canadian cents to yield 3.261 percent. (Additional reporting by Claire Sibonney; editing by Rob Wilson)
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