* C$ ticks lower at 95.97 U.S. cents
* Bonds higher, track U.S. Treasuries
* Bank of Canada rate decision on Wednesday
TORONTO, Sept 7 (Reuters) - The Canadian dollar edged lower
against the U.S. currency on Tuesday as investors shunned
riskier assets on weak oil prices and on fresh concerns about
the European banking sector.
Oil fell to around $73 a barrel as the dollar strengthened
and Tropical Storm Hermine showed no signs it would disrupt
crude or refining output as it came ashore near the
Mexico-Texas border. [O/R]
World stocks were lower while the euro fell broadly after a
Wall Street Journal report said Europe's recent "stress tests"
of the strength of major banks underestimated some lenders'
holdings of potentially risky government debt. [MKTS/GLOB]
"We're starting our holiday-shortened week on a defensive
turn with risk aversion returning largely on the back of
increased concerns in Europe," said Matthew Strauss, senior
currency strategist at RBC Capital Markets.
"There's a bit of refocusing on the European issues. During
the summer it fell off the radar screen, and the market was
more focusing on data and news coming out of the United
At 7:43 a.m. (1143 GMT), the Canadian dollar was at
C$1.0420 to the U.S. dollar, or 95.97 U.S. cents, down from
Friday's Bank of Canada closing level at C$1.0393 to the U.S.
dollar, or 96.22 U.S. cents.
The currency's move lower on Tuesday follows a rally late
last week on better-than-expected U.S. jobs data, supporting
expectations the Bank of Canada will raise interest rates this
The Bank of Canada decides on interest rates on Wednesday
in one of the closer calls in some time. [CA/POLL]
Strauss said the next key technical levels to watch out for
included support at C$1.0326 to the U.S. dollar and resistance
Canadian bond prices were higher across the curve, tracking
U.S. Treasuries on Tuesday on worries about the health of
European banks. [US/]
The two-year Canada bond
was up 6 Canadian cents
to yield 1.347 percent, while the 10-year bond rose
25 Canadian cents to yield 2.917 percent.
(Editing by Padraic Cassidy)