June 28, 2011 / 1:13 PM / 9 years ago

CANADA FX DEBT-C$ firms on Greece hopes, market still cautious

 * C$ firms to C$0.9852, or $1.0150
 * Bond prices weaker across the curve
 By Solarina Ho
 TORONTO, June 28 (Reuters) - The Canadian dollar was firmer
against the U.S. dollar on Tuesday, amid optimism that a
solution could be reached over Greece's sovereign debt.
 France's President Nicolas Sarkozy said French banks had
reached a draft agreement with the authorities for banks to
roll over Greek debt. [ID:nL6E7HS1H7] [ID:nLDE75P0BM]
 While the news settled investor nerves, the currency still
traded within in a tight range ahead of parliamentary votes in
Athens this week to approve unpopular austerity measures that
are a precondition for international aid.
 "The overall theme is, it's not specifically the Canadian
dollar. Obviously it's global concerns," said John Curran,
senior vice president at CanadianForex, a commercial foreign
exchange dealing firm.
 "Even if we do get something positive out of Greece, it's
going to be short lived. In the back of people's minds, there's
a lot of caution in these markets."
 Oil, a key Canadian export, provided some support as prices
rose on the news over Greece, but gains were capped with oil
heading for its worst month in a year. [O/R]
 At 8:45 a.m. (1245 GMT), the currency CAD=D4 stood at
C$0.9852 to the U.S. dollar, or $1.0150, firmer than Monday's
North American close of C$0.9867 to the U.S. dollar, or
 Investors will continue to monitor key data for further
hints on the economic recovery, with U.S. data, including
consumer confidence, expected later on Tuesday and Canadian
inflation data expected on Wednesday.
 "CPI -- it has the possibility to make people think there
could be a rate hike. There's not a chance," said Curran. "Even
if inflation numbers are high, it's an opportunity to sell
high. If anything, I think what you'll see is there will be
stronger negative reaction to poor numbers than there would be
to a positive, just in this backdrop."
 Canadian bond prices were mostly lower across the curve as
investors dipped back into riskier assets.
 The two-year bond CA2YT=RR slipped 5 Canadian cents to
yield 1.429 percent, while the 10-year bond CA10YT=RR gave
back 15 Canadian cents to yield 2.924 percent.
 (Reporting by Solarina Ho, Editing by Chizu Nomiyama)

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