* C$ ends session higher at C$1.0054, or 99.46 U.S. cents
* Bonds mixed on Canada rate hike view, U.S. debt sale
By John McCrank
TORONTO, April 29 (Reuters) - The Canadian dollar gained against the greenback on Thursday as optimism grew that a bailout deal for Greece will be reached, whetting the market's appetite for riskier cyclical assets such as oil, which Canada exports.
European Union and International Monetary Fund officials are in Athens negotiating a multibillion-euro aid package for Greece to help it avoid a debt default.
If unresolved, the debt crisis in Greece could have far-reaching effects. Bank of Canada Governor Mark Carney warned on Thursday that it had the potential to indirectly hurt the Canadian economy as growth in global markets is curtailed. [ID:nN29250629]
EU and IMF officials said they hope to wrap up a deal within days in an effort to prevent the debt crisis from spilling into other fragile EU states. [ID:nLDE63S0BL]
Hope for a deal helped boost North American equities.
"Basically, there is less risk aversion and investors are more willing to buy riskier assets," said Matthew Strauss, senior currency strategist at RBC Capital Markets.
He added that all commodity-based currencies were stronger on the day.
The Canadian dollar
The price of U.S. crude oil topped $85 a barrel, as commodity markets broadly advanced. [ID:nSGE63S07H]
Exports of commodities make up a big chunk of the Canadian economy, and the country's currency is often influenced by moves in their prices.
Looking forward, Canadian gross domestic product data for February will be released on Friday, but the bigger draw will come from south of the border, as the first read of the U.S. GDP for the first quarter is released.
In the fourth quarter of last year, U.S. GDP came in surprisingly strong, at 5.6 percent, signaling a faster recovery than earlier expected. First quarter U.S. growth is expected to have been 3.4 percent. [ID:nN29243362]
"If it continues pointing towards the weekend as the possible timeframe for an agreement on a Greek deal, there will be a lot of attention paid to the U.S. data," Strauss said.
"So, going into tomorrow, the market will still be following the Greece developments very closely, and then the GDP data."
BONDS MIXED
Canadian bond prices were mixed, with the short end lower, reflecting a move from safe-haven bonds to riskier assets. The long end was higher along with the U.S. market, which saw strong demand for a seven-year note sale.
Doug Porter, deputy chief economist at BMO Capital Markets, said the higher yields on the short end could also be attributed to expectation of higher interest rates in Canada in the not too distant future. Yields move in the opposite direction to prices.
"On the short end, we saw a little bit of a backup in yields today as I think the market regained a bit of confidence that the Bank (of Canada) would likely be hiking (rates) in June," Porter said.
He said the ongoing debt trauma in Europe, coupled with Bank of Canada Governor Carney's recent statements that the timing of a rate hike was not "preordained," had cast some doubt on how soon rates would rise. [ID:nN27120558]
The two-year Canadian government bond