* C$ ends at C$0.9948 to the US$, or $1.0052
* Greek debt deal progress lifts market
* Bond prices mostly lower
By Jon Cook
TORONTO, Feb 7 The Canadian dollar firmed
against its U.S. counterpart on Tuesday, as commodities were
boosted by renewed optimism that a Greek debt deal was near.
A range of commodity linked currencies like the Canadian
dollar rallied on news Greece was close to terms on a bailout,
after a Greek official said Athens was drafting a list of
austerity reforms needed to clinch a new financial package.
Failure to secure the 130 billion euro ($170 billion) rescue
would mean Greece faces a messy debt default that could
destabilise the entire European Union.
"The worst-case scenario, which is a disorderly default and
Greece being cut off from the EU, no longer seems imminent,"
said David Woo, head of global rates and currencies research at
Bank of America Merrill Lynch. "From the market's standpoint, at
least for the time being, more orderly conditions are going to
The Canadian dollar finished at C$0.9948 to the
U.S. dollar, or $1.0052, up slightly from Monday's finish of
C$0.9955, or $1.0045.
Canada's move against the greenback trailed the euro's,
which hit an eight-week high at $1.3270 against the U.S.
"People look at the Canadian dollar as basically a very
low-beta U.S. dollar," said Woo. "So when the U.S. dollar goes
down the Canadian dollar is not going to go up as much against
the U.S. dollar than some of the other currencies."
Despite the Canadian currency's rise above the 1-to-1 level
with the U.S., some analysts predict it will end the year
On Tuesday, Capital Economics forecast the Canadian dollar
will finish the year around 92 U.S. cents, predicting more
problems in the euro zone will hobble the global economy.
In central bank news, Federal Reserve Chairman Ben Bernanke
renewed a pledge to prevent Europe's crisis from damaging the
U.S. economy in congressional testimony that mirrored his
remarks last week.
Last month, Bernanke stirred markets when the Fed predicted
interest rates would stay on hold until at least late 2014,
sparking speculation there could also be another round of
"We know that Mr. Bernanke has been a fan of QE and there's
always talk of could there be further influences?" said C.J.
Gavsie, managing director of foreign exchange sales at BMO
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 four Canadian cents to yield 1.043 percent.
The 10-year bond fell 60 Canadian cents to yield