CANADA FX DEBT-C$ rises with equities, oil, on Greek hope

Tue Jun 21, 2011 10:05am EDT
 
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   * C$ at C$0.9747 to the U.S. dollar, or $1.0260
 * Bond prices weaker across curve
 By Solarina Ho
 TORONTO, June 21 (Reuters) - The Canadian dollar was firmer
against major currencies on Tuesday as a wave of optimism swept
over equity and commodity markets on hopes that Greek Prime
Minister George Papandreou would survive a confidence vote that
could help avert a default on the country's debt.
 Economic data in Canada provided little clear direction as
Canadian retail sales numbers for April were below
expectations, but the leading indicator for May was stronger.
[nSCLLHE7DJ] [nSCLLHE7DK]
 Crude oil climbed from a four-month low as the U.S. dollar
weakened against the euro as investors shifted back into
riskier assets on hopes for the Greek parliamentary vote,
expected at 5 p.m. ET (2100 GMT). [O/R] [FRX/]
 "We got a little bit of a rebound in commodity markets ...
with crude oil prices returning back above $94 a barrel," said
George Davis, chief technical strategist at RBC Capital
Markets. "The mild improvement in the risk backdrop has helped
the Canadian dollar across the board, not just against the U.S.
dollar."
 "What everyone is waiting for now is the vote later this
afternoon in Greece...judging by the overall firmness in the
euro, the market is generally positioning itself for a positive
outcome in terms of the confidence vote going through OK."
 At 9:23 a.m. (1323 GMT), the currency CAD=D4 was at
C$0.9747 to the U.S. dollar, or $1.0260, up from Monday's North
American finish of C$0.9802 to the U.S. dollar, or $1.0202.
Earlier in the day, the currency rose as high as C$0.9738, or
$1.0269.
 Davis said he expected the currency to trade between
C$0.9720 and C$0.9780 on Tuesday, adding that the Canadian
dollar would likely hold on to its overnight gains heading into
the vote in Greece if equity markets remain firm.
 The move back toward risk pushed most Canadian government
bond prices lower.
 The two-year bond CA2YT=RR was flat, yielding 1.523
percent, while the 10-year bond CA10YT=RR fell 12 Canadian
cents to yield 2.980 percent.
 (Reporting by Solarina Ho; editing by Peter Galloway)