* C$ at C$0.9797 vs US$, or $1.0207
* Euro zone fears set tone
* Current account a negative, but market impact limited
* Bond prices push higher across curve
(Updates with details, commentary)
By Claire Sibonney
TORONTO, Aug 30 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Tuesday, taking its cue from a weaker euro amid nagging European debt fears.
The euro fell broadly as softer-than-expected demand at an Italian debt auction added to worries over the euro zone periphery, with sentiment already hit by bickering between euro zone countries about the terms of a Greek bailout deal. [FRX/]
The concern helped boost the U.S. dollar against a range of currencies perceived to be riskier, including the Canadian dollar.
An unexpectedly wide Canadian current account deficit was also a negative for the currency, though analysts said the market impact was limited. Traders were seen focused on upcoming U.S. consumer confidence data and Federal Reserve minutes south of the border. [nN1E77T08R]
"There are bigger fish to fry at the moment. I don't think people are paying enough attention to Europe ... it's not going away any time soon," said John Curran, senior vice president at CanadianForex.
"Canada is probably just going to be dragged around by the nose until we get some deeper data points for our own country, realistically tomorrow and next week," he added, pointing to second-quarter gross domestic product figures on Wednesday and August employment numbers next Friday. U.S. employment numbers are due this coming Friday.
At 9:23 a.m. (1423 GMT), the Canadian dollar stood at C$0.9797 to the U.S. dollar, or $1.0207, down from Monday's North American session close at C$0.9771 versus the greenback, or $1.01234.
Curran said support for the U.S. dollar remains at C$0.9750 and C$0.9715 while resistance above comes at C$0.9790, C$0.9825 and C$0.9880.
Canadian bond prices tracked the market's risk aversion higher. The two-year bond CA2YT=RR was up 7 Canadian cents to yield 1.027 percent, while the 10-year bond CA10YT=RR added 37 Canadian cents to yield 2.418 percent. (Editing by Jeffrey Hodgson)