CANADA FX DEBT-C$ ends stronger on ECB rate cut, Greece progress

Thu Nov 3, 2011 4:32pm EDT
 
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   * C$ ends at C$1.0081 vs US$ or 99.20 U.S. cents
 * Risk assets rally after surprise ECB rate cut
 * Focus on Canada, U.S. jobs data on Friday
 * Bond prices fall
 By Andrea Hopkins
 TORONTO, Nov 3 (Reuters) - The Canadian dollar ended
stronger on Thursday after the European Central Bank announced
a surprise interest rate cut and hopes rose that Greece will
abandon plans to hold a referendum on the euro-zone bailout.
 Global stocks, crude oil and other risk assets, including
the Canadian dollar, rallied after the ECB rate cut and news
that Greece's teetering government was backing away from
holding a referendum on the EU debt deal and staying in the
euro. [MKTS/GLOB]
 "We're at the highs today because it looks increasing
unlikely that we're going to get the referendum in Greece, so
that's seen as positive for markets," said Shane Enright,
executive director, foreign exchange sales at CIBC World
Markets.
 "You've obviously got stronger equity markets, commodity
prices are up a little bit, so asset markets across the board
have rallied."
 The Canadian dollar CAD=D3  ended the North American
session at C$1.0081 to the U.S. dollar, or 99.20 U.S. cents,
just off session highs of C$1.0055 and well above Wednesday's
North American session close of C$1.0136 to the U.S. dollar, or
98.66 U.S. cents.
 The surprise rate cut by the ECB added to moves by other
monetary policymakers to stimulate the economy a bit to avoid a
recession, though new ECB President Mario Draghi said the euro
zone could enter a "mild recession" later this year.
 "It looks like we're got policy stimulus coming from the
U.S., policy stimulus coming from Japan to the extent that they
can, policy stimulus from the UK and policy stimulus from the
ECB, which begins to ease some of the cyclical concerns as we
head towards year-end," said David Watt, senior currency
strategist at Royal Bank of Canada.
 Still, uncertainty reigns over the European debt crisis as
European leaders talked for the first time of a possible Greek
exit from the euro zone to preserve the single currency. For
details, see: [nL5E7M300J]
 A drop in U.S. jobless claims also helped feed Thursday's
bid for risk assets.
 Market focus was moving to U.S. and Canadian employment
data due out on Friday for signs of further economic recovery,
or further weakness.
 Canadian jobs data is due out at 7 a.m. (1100 GMT).
Analysts expect a 12,200 gain in jobs and an unemployment rate
of 7.1 percent.
 A Reuters poll of global foreign-exchange strategists
released on Thursday showed they expect the Canadian dollar to
hold steady just below U.S. dollar parity in the next few
months before regaining parity in six months and edging higher
than the greenback a year from now.  [CAD/POLL]
 The poll of 49 strategists showed slightly more buoyant
forecasts for the Canadian currency in the near term than did a
similar poll a month ago.
 Canadian government bond prices were lower across the
curve. The two-year bond CA2YT=RR fell 7 Canadian cents to
yield 1.002 percent, while the 10-year bond CA10YT=RR dropped
34 Canadian cents to yield 2.210 percent.
 (Editing by Jeffrey Hodgson and Peter Galloway)