CANADA FX DEBT-C$ slips with fears of Greek euro exit

* C$ at C$1.0040 vs US$, or 99.60 U.S. cents
    * Bond prices edge higher across curve

    By Claire Sibonney	
    TORONTO, May 14 (Reuters) - The Canadian dollar fell against
its U.S. counterpart on Monday as higher yielding currencies
were pressured by mounting political uncertainty in Greece and
worries about slowing Chinese and global growth.	
    Problematic negotiations on forming a new Greek government
have increased the chances it will be unable to meet the
conditions of its bailout deal and be forced to exit the euro
zone, while a worsening fiscal position in Spain has added to
the sense of crisis facing the region. 	
    "Europe is definitely driving things," said Mark Chandler,
head of fixed income and currency strategy at RBC Capital
Markets. He said there were "continued worries after ECB
officials had talked about the potential exit of Greece from the
    In Germany Chancellor Angela Merkel's conservatives suffered
a crushing defeat on Sunday in an election in the country's most
populous state, a result which could embolden the left
opposition to step up attacks on her European austerity
    This added to growing concerns of a global economic slowdown
triggered by last week's lackluster industrial output data from
China, weighing on commodity prices. 	
    At 8:06 a.m. (1206 GMT), the Canadian dollar stood
at C$1.0040 versus the U.S. dollar, or 99.60 U.S. cents, down
from Friday's C$1.0009 versus the U.S. dollar, or 99.91 U .S.
    Chandler said markets were little moved by China's bank
reserve ratio cut over the weekend. 	
    "To be honest, earlier in the year you would have thought
that that would have helped riskier assets, but it just didn't
seem to provide much support at all," he said.	
    Canadian bond prices climbed across the curve. The two-year
government bond rose 7 Canadian cents to yield 1.266
percent, while Canada's 10-year bond jumped 47
Canadian cents to yield 1.920 percent.