TORONTO: The Canadian dollar was higher against the greenback on Thursday afternoon, surging up from a two-week low earlier in the day on upbeat US economic data and optimism that European leaders could be nearing a deal to avoid a Greek debt default.
The currency followed overseas equity markets and the euro higher after a euro zone official said EU leaders were putting the finishing touches on a second debt bailout for Greece.
Also supporting the currency was firmness in US stocks, which rose on upbeat US jobs, manufacturing and housing data.
"The Canadian dollar is up almost a cent from its lows this morning, the euro had a huge rally and commodities have had a strong performance," said Blake Jespersen, a managing director of foreign exchange sales at BMO Capital Markets.
"All that helped lift the Canadian dollar. Not a Canadian dollar story, but it did follow the moves in other commodity-based currencies and the overall risk sentiment."
At 1:25 p.m. (1825 GMT) the Canadian dollar stood at C$0.9960 versus the US dollar, or $1.0040, up from Wednesday's North American close of C$0.9991 versus the US dollar, or $1.0009.
The currency fell as low as C$1.0052, or 99.48 US cents, early in the session, its weakest level since Jan. 31, after Moody's warned it might cut the credit ratings of 17 global and 114 European financial institutions.
Jespersen said he sees the Canadian dollar trading in a short-term range of C$0.9950 to C$1.0050 against the greenback.
Canadian bond prices dropped in tandem with US Treasuries, which fell as Greek optimism reduced investor appetite for safe-haven government debt.
Canada's two-year bond retreated 4 Canadian cents to yield 1.078 percent. The 10-year bond fell 26 Canadian cents to yield 2.044 percent.
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