November 13, 2012 / 2:13 PM / in 6 years

Canada dollar weaker over Greece uncertainty

TORONTO (Reuters) - The Canadian dollar was slightly weaker against the U.S. currency on Tuesday in choppy trade, with uncertainty over aid to Greece hurting the value of riskier assets.

European countries deliberating on the payment of delayed loans to Greece could decide to bundle several tranches together in a single transfer of roughly 44 billion euros, a German government source said.

The news lifted the euro, but investors remained concerned as Greece’s international lenders clashed over the time frame Athens needs to bring its debt down.<FRX/>

“This morning has been a push and pull from risk appetite, with mostly weaker risk appetite prevailing as it relates to confusion about the next payment for Greece,” said Mark Chandler, head of Canadian fixed income and currency strategy of Royal Bank of Canada.

At 8:24 a.m. (1324 GMT), Canada’s dollar was trading at C$1.0014 to the U.S. dollar, or $0.9986. The Canadian dollar finished Monday’s trading at C$0.9995 versus the U.S. dollar, or $1.0005.

It was also underperforming most major currencies, including the euro and the Australian dollar.

The Canadian dollar also tracked lower oil prices and weaker equities. <MKTS/GLOB/> <O/R>

No major economic data is expected during the North American session, however, the Canadian government will be releasing its economic and fiscal update.

“Nobody’s expecting a big change in the deficit target, ourselves included, but ... we think eventually there will be new measures forthcoming, just not in this update. There may some hint of that in the press conference,” said Chandler.

The currency was likely to trade between C$0.9985 and C$1.0025, according to RBC.

The price of Canadian government debt rose across the curve, with the two-year bond up 1.5 Canadian cents to yield 1.078 percent. The benchmark 10-year bond was up 20 Canadian cents to yield 1.693 percent.

With additional writing by Jeffrey Hodgson; Editing by Theodore d'Afflisio

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