* C$ at C$0.9960 to the US$, or $1.0040
* Greek debt deal progress lifts market
* Bond prices mostly lower
By Jon Cook
TORONTO, Feb 7 The Canadian dollar pared
losses against its U.S. counterpart on Tuesday morning and
looked set to move higher after a Greek official said Athens is
drafting a bailout agreement to be placed before political
leaders for approval later in the day.
Greece has been in talks to come to terms on new austerity
measures demanded by the European Union in return for another
bailout, which needs to be approved by Feb. 15 if the money is
to be available in time for Athens to meet a 14.5 billion euro
($18.96 billion) bond redemption in March.
In the absence of a signed deal, investors have been
hesitant to throw their money into riskier commodity-linked
currencies such as the Canadian dollar.
"We're seeing sideways trade here," said C.J. Gavsie,
managing director of foreign exchange sales at BMO Capital
At 9:11 a.m. (1411 GMT), the Canadian dollar stood
at C$0.9960 to the U.S. dollar, or $1.0040, little changed from
Monday's finish of C$0.9955, or $1.0045.
In the absence of economic data in North America, focus was
on Tuesday afternoon's U.S. Senate testimony by Federal Reserve
Chairman Ben Bernanke. Last month, Bernanke announced he would
keep interest rates on hold until 2015, sparking speculation
there could also be another round of quantitative easing.
"We know that Mr. Bernanke has been a fan of QE and there's
always talk of could there be further influences," Gavsie said.
Gavsie said he saw the Canadian dollar staying close to
current levels - likely in a range between C$0.9960 and C$1.0030
- and that a push towards Monday's high of C$0.9930 would be
unlikely without a Greek deal.
Canadian bond prices were mostly lower, with the two-year
bond down three Canadian cents to yield 1.038
percent. The 10-year bond fell 30 Canadian cents to
yield 2.007 percent.