* C$ at C$1.0017 to US$, or 99.83 U.S. cents
* Greek debt deal stalls
* Canada trade surplus helps currency pare losses
* Bond prices higher
By Jon Cook
TORONTO, Feb 10 The Canadian dollar
slumped on Friday against its U.S. counterpart after a bailout
deal for Greece met with fresh opposition, but the currency's
slide was tempered by data that showed Canada's trade surplus
unexpectedly rose to a three-year high in December.
Overnight the Canadian dollar had fallen below parity with
the greenback for the first time in more than a week after the
leader of a far-right party in Greece's coalition government
said he could not back a recently negotiated debt bailout
agreement, reigniting worries about a chaotic default.
Athens faces a deadline next week to have a deal in place to
secure a 130 billion euro ($172.95 billion) rescue package from
the European Union to finance massive bond redemptions coming
due in March.
The news knocked the euro from its two-month high on
Thursday against the U.S. dollar.
Canada's currency has largely traded in step with the euro
for much of the year, rising above the one-to-one level with the
U.S. dollar. But the increased uncertainty over Greece had
investors selling riskier currencies and buying the U.S. dollar
"The news isn't coming out as expected, so rather than risk
some catastrophic news, take some profit on positions," said
Michael O'Neill, vice-president of foreign exchange trading at
At 10:50 a.m. (1550 GMT), the Canadian dollar stood
at C$1.0017 to the U.S. dollar, or 99.83 U.S. cents, down from
Thursday's close at C$0.9956, or $1.0044.
Early losses were pared after a Statistics Canada report
showed Canada's monthly trade surplus unexpectedly rose to a
three-year high of C$2.7 billion in December.
The currency had fallen as low as C$1.0040, or 99.60 U.S.
cents, earlier in the session. O'Neill said it would likely
trade between that level and a high of C$0.9980 on Friday.
"If it goes below that then we're back into we love
everything," he said.
On Thursday, optimism over a Greek debt deal and strong U.S.
jobless numbers led investors to turn their backs on the
safe-haven appeal of bonds, pushing some yields to year-to-date
highs. The 10-year yield touched a 2012 peak of 2.135 and the
30-year yield reached a high of 2.708 percent.
On Friday, bond prices snapped back across the curve with
the two-year bond climbing three Canadian cents to
yield 1.082 percent. The 10-year bond was up 34
Canadian cents to yield 2.053 percent.