* Touches low of C$1.0258 to the US$, or 97.48 U.S. cents
* Oil prices drop below $83 a barrel
* Bonds rise as investors flock to safe havens (Updates to closer, adds details, quotes)
By Claire Sibonney
TORONTO, May 4 (Reuters) - The Canadian dollar sank to its lowest level against its U.S. counterpart in five weeks on Tuesday as worries about the Greek aid package intensified, rattling oil and equity markets.
The Canadian currency fell almost 1-1/2 U.S. cents to touch a low of C$1.0258 to the U.S. dollar, or 97.48 U.S. cents minutes after the official Bank of Canada close, its weakest level since March 29, as equity markets around the world were hammered by investor skepticism that a weekend agreement among European countries and the International Monetary Fund to bail Greece out of its debt problems would succeed. [MKTS/GLOB] [.N] [.TO]
Concern about debt woes in the euro zone drove investors to the safety of the greenback, which in turn pressured oil and metals prices. [O/R] [GOL/]
U.S. crude futures dropped $3.45, or 4 percent, to settle below $83 a barrel, while gold tumbled after hitting five-month highs above $1,190 earlier in the day.
"It's contributing to a strong flight to safety and to U.S. Treasury markets and a downturn in commodity prices, both of which weigh against the Canadian dollar," said Sal Guatieri, senior economist at BMO Capital Markets.
The euro hit a one-year low against the greenback on Tuesday on fears that Greece's woes would spread to other vulnerable euro zone countries. [FRX/]
"They're worried that Europe's economy will come to a screeching halt and drag down global commodities," Guatieri said.
The Canadian dollar CAD=D4 closed the North American session at C$1.0250 to the U.S. dollar, or 97.56 U.S. cents, down from Monday's North American finish at C$1.0106 to the U.S. dollar, or 98.95 U.S. cents.
Significant risk aversion started overnight and flowed into the North American session, said Matthew Strauss, senior currency strategist at RBC Capital Markets.
"It's broad-based risk version mostly driven by increased contagion fears in Europe," Strauss said.
He added that market watchers will be looking at key technical levels, with "trend line resistance coming in at C$1.0325".
"A daily close above that level could indicate a sentiment change towards the Canadian dollar and could open the way for a further rally in dollar/Canada," Strauss said.
Guatieri said that until markets become more comfortable with the European credit situation, it may take a while for the Canadian dollar get back to parity.
"We'll see how the situation plays out in coming weeks but for the moment it's a major headwind for the Canadian dollar."
BONDS MOVE HIGHER
Canadian bond prices moved higher across the curve, following a rise in U.S. Treasuries fueled by safe-haven demand for government debt. [US/]
The concerns about Europe and contagion fears could result in a slower global recovery than is priced in the market, Strauss said. "If that's the case, it could actually put a damper on central bank tightening or normalizing interest rates."
The two-year Canadian government bond CA2YT=RR climbed 22 Canadian cents to C$99.545 to yield 1.753 percent, while the 10-year bond CA10YT=RR shot up 64 Canadian cents to C$99.500 to yield 3.560 percent. (Additional reporting by Jennifer Kwan; editing by Peter Galloway)