February 10, 2010 / 2:56 PM / 10 years ago

CANADA FX DEBT-C$ flat as investors await news on Greece

 * C$ little changed at 93.66 U.S. cents
 * Bonds mixed
 By Claire Sibonney
 TORONTO, Feb 10 (Reuters) -  Canada's currency was little
changed against the U.S. dollar on Wednesday as investors
sought clarity on whether Greece will get financial aid and
North American trade gap figures underwhelmed.
 Euro zone countries were holding intensive talks about a
possible financial rescue for debt-stricken Greece and European
Union leaders are set to hold a special summit on the economy
on Thursday.
 "It's a story of Europe and whether or not there will be a
strategy released from the EU as to how they're going to deal
with the weaker states, or weaker members, and I think the
market is very much focused on that," said Camilla Sutton, a
currency strategist at Scotia Capital.
 "There's an awful lot of headlines going back and forth and
that's having an impact across currency markets and on Canada
as well."
 At 9:30 a.m. (1430 GMT) the Canadian dollar was at C$1.0677
or 93.66 U.S. cents, up slightly from Tuesday's close at
C$1.0679 or 93.64 U.S. cents.
 Sutton points to mixed trade deficit figures from both
Canada and the United States that initially saw the Canadian
dollar drop slightly.
 Canada's trade deficit widened in December to a level more
than twice what was expected as trade with non-U.S. countries
deteriorated further, but was offset by a downward revision in
November figures to C$201 million from C$344 million.
 The U.S. trade deficit widened unexpectedly in December to
$40.2 billion, fueled by the highest oil prices and oil imports
since October 2008, but both exports and imports increased
month over month, a positive sign for economy.
 "The data was slightly confusing and dollar/Canada's
reaction was to move higher, so a little bit of Canadian
weakness but really we're not too far from where we were at the
open," said Sutton.
 Traders will also look ahead to Federal Reserve Chairman
Ben Bernanke's testimony at 10 a.m. (1500 GMT) for an outline
on the Fed's exit strategy for tightening monetary policy.
 Canadian bond prices were mixed as uncertainty over rescue
plans for Greece contributed to the risk-on, risk-off trend.
 The two-year bond CA2YT=RR was up 1.5 Canadian cents to
C$100.45 to yield 1.277 percent, while the 10-year bond
CA10YT=RR rose 2 Canadian cents to C$102.92 to yield 3.381
 (Reporting by Claire Sibonney; Editing by Jeffrey Hodgson)

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