TORONTO (Reuters) - The Canadian dollar was little changed against the U.S. currency on Wednesday morning as markets braced for the outcome of the Greek debt restructuring deal, and evidence mounted of a weaker outlook for the global economy.
Greek private creditors have until late Thursday to say whether they will take part in a bond swap deal which would enable Greece to make a debt repayment on March 20, sparking concerns about a chaotic default if participation is low.
Global economic concerns have intensified this week after a slowdown in growth outlook from China and Brazil and fears that Europe is headed towards another recession.
“The market got thrown a little curve ball with the downgrade in Chinese growth,” said Shane Enright, executive director of foreign exchange sales at CIBC World Markets. “That’s been primarily what’s been responsible for most of the weakness in the commodities currencies.”
At 8:22 a.m., the Canadian dollar stood at C$1.0012 against the U.S. dollar, or 99.88 U.S. cents, little changed from Tuesday’s North American session close at C$1.0006 against the U.S. dollar, or 99.94 U.S. cents.
The Canadian dollar has lost more than a cent against the greenback this month, tumbling 1.2 percent from its February close at C$0.9895 against the U.S. dollar, a five-month high.
Apart from Greece, currency traders were looking ahead to Chinese inflation and U.S. jobs data on Friday.
“In that respect, you’ve got important news from all three of the major regions over the next 24 hours,” said Enright.
“The market will want to digest all of that before it decides whether this correction is just an alleviation of what’s been pretty much a one-way directional bet on risk since January 1, or whether it’s the start of a larger correction.”
Also on Thursday, the Bank of Canada will report results from its next policy meeting, where it is expected to keep the overnight interest rate at its current 1 percent.
Enright said that, for the day, the Canadian currency should hold within a tight range between C$.9980 on the high end and C$1.0060 on the low side.
Canadian bond prices were mixed, with the two-year bond up a Canadian cent to yield 1.076 percent. The 10-year bond fell two Canadian cents to yield 1.938 percent.
Editing by James Dalgleish