* C$ closes up at C$0.9993 vs US$, or $1.0007
* Bond prices drift lower
TORONTO, Feb 13 (Reuters) - Canada’s dollar edged up against the greenback on Monday after Greece’s parliament passed tough austerity measures to avoid a debt default, but doubts about whether European leaders will fully support Athens, or whether it will be able to keep its austerity promises, subdued early enthusiasm.
The Canadian currency tracked a broad move higher by commodities and equities, but the gains looked fragile with several issues still to be resolved before the shadow of a messy debt default in Greece is lifted.
“There are still a lot of hurdles ahead of us but we are in a better place than we were at the end of last week,” said Camilla Sutton, chief currency strategist at Scotia Capital.
“I think the biggest question mark is likely the ... private sector involvement for the debt negotiations.”
Greek lawmakers on Sunday backed sweeping budget cuts in exchange for a 130 billion euro bailout from the European Union and the International Monetary Fund.
Euro zone finance ministers meeting on Wednesday, however, may still withhold final approval for the debt package until it is clear what proportion of Greece’s private creditors will agree to take losses.
The Canadian currency ended the North American session at C$0.9993 versus the U.S. dollar, or $1.0007 U.S., up from Friday’s North American session close of C$1.0028 to the U.S. dollar, or 99.72 U.S. cents. It had its biggest weekly drop of the year so far last week.
Sutton said the Canadian dollar will likely trade between C$0.9944 and C$1.0020 on Tuesday.
“I think Greece is grabbing a lot of headlines but I’m not fully convinced it’s the real driver,” she said. “I think the real driver of the rally has been G4 central banks in terms of having loose policy and fueling liquidity, low volatility and the carry trade or risk asset buying.”
RBC Capital Markets put near term U.S.-dollar resistance at C$1.0051 and support at C$0.9976.
“Really, in terms of what’s driving the Canadian dollar, there’s not a heck of a lot domestically behind it,” said Mark Chandler, head of fixed income and currency strategy at RBC Capital Markets.
“It’s not a question of Canada, say, outperforming in terms of the economy relative to others. If anything our data has been mildly disappointing compared to the positive surprises you’re seeing elsewhere, in the U.S. in particular.”
Canadian bond prices retreated alongside U.S. Treasuries as investors turned away from safe-haven plays. Canada’s two-year bond fell 3 Canadian cents to yield 1.088 percent. The 10-year bond drifted down 17 Canadian cents to yield 2.072 percent. (Reporting by Claire Sibonney; Editing by Peter Galloway)
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