* C$ hits 2012 high before easing back
* Supported by news Greek deal has been reached
* Shrugs off domestic Dec home prices data
* Bond yields hit 2012 highs
By Andrea Hopkins
TORONTO, Feb 9 Canada's dollar
strengthened to a 2012 high against its U.S. counterpart on
Thursday on firmer oil prices and as investors sought riskier
assets on news of a Greek bailout package, but gains were curbed
by lingering fears of a default.
News that Greek leaders had clinched a long-stalled deal
just hours before a key meeting with the country's financial
backers encouraged investors to take on some risk, driving down
prices of safe-haven U.S. Treasuries.
Oil rallied more than 1 percent and global stocks gained on
the agreement, which is crucial for Greece to secure a 130
billion euro ($172 billion) bailout from the European Union and
the International Monetary Fund. But risk assets eased back
later in the day amid questions on whether the deal will be
enough to avoid a messy default.
"We're really waiting to see if stocks and commodity
currencies, whether we're going to get a further instance of
this risk-on trade that has been quite powerful for much of this
year so far," said David Watt, senior currency strategist at
Royal Bank of Canada.
The Canadian dollar rose as high as C$0.9925 to the
U.S. currency, or $1.0076, in early trade before easing back a
bit to close the day at C$0.9956, or $1.0044, up slightly from
Wednesday's close at C$0.9961 to the U.S. dollar, or $1.0039.
The day's peak was the currency's highest level since Oct. 31.
"We're really watching that C$0.9950 level," said Watt. "We
broke the 200-day moving average the other day which is
providing that backstop now at C$0.9971, but haven't yet closed
through that C$0.9950 level."
The currency also drew support from firmer oil prices, a key
Canadian export. Oil futures gained on news of the Greek deal
and as data showed U.S. weekly jobless claims dipped.
The currency showed little reaction to domestic home prices
data, which showed the pace of growth in new home prices slowed
in December compared to the previous month in a sign the hot
housing market may be cooling.
BOND YIELDS HIT 2012 HIGHS
Canadian government bond prices were lower, following moves
in the U.S. Treasury market that added to earlier losses as the
jobs data hinted at further improvement in the labor market,
denting the appeal of safe-haven government bonds.
The two-year bond slipped 3 Canadian cents to
yield 1.093 percent. The 10-year bond fell 28
Canadian cents to yield 2.097 percent. The yield briefly touched
a 2012 high of 2.135. The 30-year yield also hit a year-to-date
high of 2.708 percent.