TORONTO -- The Canadian dollar rose against the U.S. dollar Monday as concerns about debt problems in the euro zone eased, helping to boost investor demand for commodity linked currencies.
The U.S. dollar was broadly weaker, with the euro supported by an agreement late last week by euro zone leaders on a financial safety net for Greece.
“There is some relief now that there is a plan for the EU to support some of its weaker members” said Camilla Sutton, a currency strategist at Scotia Capital.
Commodities, which are generally priced in U.S. dollars, benefited from the weaker greenback, and in turn helped boost the Canadian dollar.
At 8:35 a.m. (1235 GMT), the Canadian dollar was at $1.0214 to the U.S. dollar, or 97.90 U.S. cents, up about 0.5% from Friday’s finish at $1.0267 to the U.S. dollar, or 97.40 U.S. cents.
Greece launched a highly-anticipated sovereign bond issue on Monday to refinance its ballooning debts.
It opened its book on a seven-year benchmark euro bond with a price guidance around mid-swaps plus 310 basis points, lead managers said.
There are no major Canadian economic data releases Monday, so the currency will likely be influenced by moves in the U.S. dollar and in commodities like oil, natural gas, and gold, which are major Canadian exports.
Oil was headed toward US$81 early Monday, supported by the weaker dollar and positive data, including higher euro zone sentiment.
Gold hit its highest in more than a week, rising as high as US$1,112.65 an ounce.
The next major Canadian data is Wednesday, with the seasonally adjusted gross domestic product for January.
With global equity markets on the rise, Canadian bond prices were mostly softer, though there were some gains in the short end.
The two-year government bond ticked 1 Canadian cent higher to $99.64 to yield 1.693%, while the 10-year bond fell 12 Canadian cents to $101.35 to yield 3.576%.
