June 26, 2015 / 9:20 PM / 2 years ago

C$ squeezes out small gain; Greece talks down to wire

3 Min Read

The new Canadian five and 10 dollar bills, made of polymer, are displayed with the previously released 20, 50 and 100 dollar notes following an unveiling ceremony at the Bank of Canada in Ottawa April 30, 2013.Chris Wattie

TORONTO (Reuters) - The Canadian dollar eked out a small gain against the greenback on Friday as the currency followed crude prices, which pared earlier losses, but overall currency markets were range-bound as a resolution over Greece's debt remained elusive.

Talks between the debt-laden country and its creditors were coming down to the wire, with last-ditch efforts planned for the weekend.

"For the most part, the theme today is still risk aversion. We don't know what's going to happen with Greece," said Rahim Madhavji, President at KnightsbridgeFX.com. "In the short term, it's still going to range-bound for a while. The one powder keg remains Greece."

The Canadian dollar CAD=D4, which was off about 0.3 percent on the week, finished at C$1.2315 to the greenback, or 81.20 U.S. cents, a touch firmer than the Bank of Canada's official close of C$1.2323, or 81.15 U.S. cents, on Thursday.

This was well off the C$1.2397 the currency traded at earlier in the session, when crude oil prices were down more than 1 percent.

"We saw oil prices jump up quite a bit from its lows ... the loonie's followed it directionally for the day," said Madhavji.

Oil ended little changed, as investors awaited news on Greece and Iran faced ongoing challenges securing a nuclear agreement to end sanctions on its oil exports.

U.S. crude CLc1 settled down 7 cents, or 0.1 percent, at $59.63 a barrel, while Brent crude LCOc1 settled up 6 cents, or 0.1 percent, at $63.26.

Market liquidity was thinning out heading into next week's Canada Day holiday on Wednesday and the U.S. Fourth of July holiday on Friday, which could result in bigger moves coming from relatively small volumes.

Canadian government bond prices were generally lower across the maturity curve, with the two-year CA2YT=RR price down 3 Canadian cents to yield 0.634 percent and the benchmark 10-year security CA10YT=RR falling 49 Canadian cents to yield 1.868 percent.

The Canada-U.S. two-year bond spread was -7.80 basis points, while the 10-year spread was -60.8 basis points.

Reporting by Solarina Ho; editing by Jeffrey Benkoe and Chizu Nomiyama

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