CANADA FX DEBT-C$ strengthens as optimism about Greek vote rises

Tue Jun 28, 2011 4:23pm EDT
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* C$ ends session at C$0.9827 to US$, or $1.0176

* Rally in oil, commodity prices fuel gains

* Bonds weaker across the curve; Canada mostly outperforms

By Trish Nixon

TORONTO, June 28 (Reuters) - The Canadian dollar strengthened against the U.S. currency on Tuesday, as optimism that Greece could find a way to avoid a debt default spurred buying of currencies with strong links to commodity prices.

World stocks jumped about 1 percent and the euro rallied on hopes an impending vote on Greece's budget and a France-led plan to roll over Greek debt will avert a full-blown euro zone debt crisis. [MKTS/GLOB]

"It seems as though the Greek austerity vote will probably get passed, which has been positive for the euro. So its risk on, so they are buying Canadian dollars on the back of that," said David Bradley, director of foreign exchange trading at Scotia Capital in Toronto.

The positive developments in Europe also spurred a rise in commodity and oil prices, which provided support for the Canadian dollar. [O/R]

The currency CAD=D4 ended the North American session at C$0.9827 to the U.S. dollar, or $1.0176, firmer than Monday's close of C$0.9867 to the U.S. dollar, or $1.0135.   Continued...