CANADA FX DEBT-C$ firms on Greece speculation, trade data

Fri Jun 17, 2011 9:16am EDT
 
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 * C$ rises to C$0.9779, or $1.0226
 * Bond prices lower across curve
 By Solarina Ho
 TORONTO, June 17 (Reuters) - The Canadian dollar firmed
against a broadly weaker U.S. dollar on Friday, benefiting from
a recovery in the euro on speculation that a new bailout
package for Greece could be on the horizon and as Canada's
wholesale trade data came in a touch better than expected.
 April's data, key in assessing monthly economic growth, saw
wholesale trade dip 0.1 percent on a sharp drop in demand for
agricultural supplies and following a revised 0.3 percent gain
in March, Statistics Canada said. [ID:nN17271262]
 Overseas, German Chancellor Angela Merkel met with French
President Nicholas Sarkozy on Friday and afterward they told a
news conference a solution had been agreed in line with the
so-called "Vienna Initiative." [ID:nB4E7GN04A] [ID:nLDE75G0UT]
 Analysts said the comments were nothing new, but European
shares turned positive and Greek bond yields and credit default
swaps fell as risk appetite improved across asset classes.
 "We've kind of been trading the headlines over the course
of the past couple of days. I think the markets are suffering
from nervous exhaustion at the moment and just don't really
know where to turn," said Shaun Osborne, chief currency
strategist at TD Securities.
 At 8:58 a.m. (1258 GMT), the currency CAD=D4 stood at
C$0.9792 to the U.S. dollar, or $1.0212, firming from
Thursday's North American finish of C$0.9832 to the U.S.
dollar, or $1.0171.
 "We're still really in a broad range here. Probably between
C$0.9700 and C$0.9900. I still think the underlying trend is
still a bit more towards Canadian dollar softness," said
Osborne.
 The currency recovered modestly after a big sell-off
earlier in the week on worries about the U.S.'s sputtering
economic recovery and Greece's debt load.
 A string of lackluster data out of the United States,
Canada's biggest trading partner, has weighed on the country's
currency, while Greece's woes have been a key catalyst in
spurring a flight to safety by investors.
 "The underlying issues for Canada are probably still that
risk assets are not performing that well. The Canadian dollar
is still a barometer for risk sentiment. I think the tone of
the U.S. numbers is still quite soft and soft numbers in the
U.S. typically translate into weaker Canadian dollar
performance overall," Osborne added.
 Canadian bond prices were lower across as investors dipped
their toes back into riskier assets. [US/]
 The two-year bond CA2YT=RR was down 4 Canadian cents to
yield 1.507 percent, while the 10-year bond CA10YT=RR fell 40
Canadian cents to yield 2.964 percent.
 (Editing by Padraic Cassidy)