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* C$ closes at $1.0171
* Drops as low as $1.0102, lowest since March 17
* Bond prices firmer across curve on safe-haven buying (Adds details)
By Ka Yan Ng
TORONTO, June 16 (Reuters) - The Canadian dollar fell hard against the greenback for a second straight day on Thursday, weakening during the session to its lowest level in three months on worries about the North American economic recovery.
Signals that have flashed U.S. weakness have included a survey on Wednesday that showed a contraction in factory activity in New York state and the Philadelphia Federal Reserve Bank's business activity index on Thursday, which added to concerns about the manufacturing sector. [ID:nN16172420]
A weak U.S. economy does not bode well for the Canadian economy, with which it is largely integrated.
"The Empire survey and the Philly Fed surveys are not kind if your major trading partner is the United States," said David Watt, senior currency strategist at RBC Capital Markets. He also pointed to soft resource prices, including oil and some base metal prices, as hurting the currency. Canada is a major exporter of commodities.
"The details are just not that encouraging for the Canadian dollar backdrop at the present time."
The factory data overshadowed better-than-expected readings on the U.S. labor and housing markets, as well as data that showed foreigners continued to pour money into Canada in April. [ID:nN16171993]
Renewed fears that Greece's debt problems were out of control were also cited as a background factor, helping to send the currency down by nearly a penny early in the session.
The currency CAD=D4 ended at C$0.9832 to the U.S. dollar, or $1.0171, weaker than Wednesday's North American finish of C$0.9790 to the U.S. dollar, or $1.0215.
It broke through C$0.9850 during the day, which some traders said was a key level that could spawn another round of Canadian dollar weakness, possibly bringing it closer to parity with the U.S. dollar.
The currency was also approaching its 200-day moving average of C$0.9925, according to Thomson Reuters data.
"A lot of other currencies are struggling to hit (their) 200-day moving average so I think that we would need a distinct, material deterioration in the U.S. and global backdrops right now, or something in Greece that really upsets sentiment even more to really test that 200-day moving average," Watt said.
"I don't think it's going to give up that easy."
At one point, the Canadian dollar fell as low as C$0.9899 to the U.S. dollar, or $1.0102 -- its weakest point since March 17 -- which analysts attributed to profit-taking from short-USD/CAD positions ahead of North American data.
"Some apprehensiveness again -- it was more taking off of positions rather than establishing new ones," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.
Canadian bond prices were stronger across the curve as investors rushed back into low-risk assets, spurred by Greece worries and the weak U.S. factory data.
The two-year bond CA2YT=RR rose 11 Canadian cents to yield 1.481 percent, while the 10-year bond CA10YT=RR added 26 Canadian cents to yield 2.923 percent. Canadian bonds mostly outperformed the U.S. counterparts across the curve. (Reporting by Ka Yan Ng; editing by Peter Galloway)