C$ pares gains on Greek concerns

TORONTO: The Canadian dollar ended slightly higher against the US currency on Wednesday as renewed concerns that a second Greek debt bailout will be delayed cut into bigger gains made early in the day.

Euro zone financial officials were examining ways of delaying parts or even all of the second bailout program for Greece, according to EU sources, and that pulled the Canadian currency back from its highest point in nearly a week.

"Certainly this Greece situation's been on everybody's mind today," said Steven Butler, head of currency trading at Scotia Capital.

"I think the market's very skeptical over what the euro finance ministers want out of Greece and whether they're going to keep kicking the goal line down the road a bit."

The Greek uncertainty helped overshadow comments from China's central bank chief that the country would keep investing in euro zone debt.

Those comments had prompted investors to take a more sanguine approach to risk, driving the euro higher versus the US dollar early in the session, and pushing up the Canadian currency.

The Canadian dollar ended the North American session at C$0.9991 versus the US dollar, or $1.0009, up slightly from Tuesday's close of C$0.9995 versus the US dollar, or $1.0005.

Helping fuel the US dollar's rebound was data showing a rise in US manufacturing output in January and higher factory activity in New York state in February. Stronger oil prices lent strength to the commodity-driven Canadian currency.

Oil ended near six-month highs as a report that Iran had banned oil exports to six European Union countries raised supply concerns. Iran's oil ministry later denied the report.

Butler said the currency could see resistance at C$1.0020-C$1.0025 to the US dollar, but said the market was tentative with all the uncertainty over the Greece.

Euro zone officials said delays in reaching a deal on the 130 billion euro bailout package for Greece could last until after the country holds elections, which are expected in April.

Canadian bond prices rose slightly during the session, following a steeper rise by US Treasuries.

Canada's two-year bond rose 2 Canadian cents to yield 1.057 percent. The 10-year bond gained 7 Canadian cents to yield 2.013 percent.