Bloomberg News

Canada Dollar Rises Through Parity Amid Bets on Greek Bond Deal

January 29, 2012

Jan. 27 (Bloomberg) -- Canada’s dollar rose, strengthening beyond parity with its U.S. counterpart for a second day, as speculation that Greece will reach an agreement with its creditors increased demand for riskier assets.

The loonie, as the currency is known for the image of the aquatic bird on the C$1 coin, headed for a third weekly gain after the Federal Reserve pledged to keep U.S. interest rates near zero through 2014. The Canadian dollar traded on a one-for- one basis with the greenback yesterday for the first time since Nov. 1. European Union leaders meet for a summit Jan. 30.

“There’s some optimism about the potential of a Greek debt deal, as well as the potential for the EU summit to be positive for market sentiment,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. “It’ll be positive for the Canadian dollar if we manage to have a close through parity.”

Canada’s dollar appreciated 0.2 percent to 99.98 Canadian cents per U.S. dollar at 8 a.m. Toronto time. It’s poised for a 1.4 percent gain this week. One Canadian dollar buys $1.0002.

EU Economic and Monetary Affairs Commissioner Olli Rehn said Greece was “very close” to reaching agreement with its private-sector bondholders on a debt swap.

--Editors: Greg Storey, Dennis Fitzgerald

To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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