* C$ lower at 93.07 U.S. cents
* Bond prices edge higher
TORONTO, Feb 8 (Reuters) - Investor anxiety over European credit woes pulled the Canadian dollar lower against its U.S. counterpart on Monday, with the greenback benefiting from safe-haven buying.
"Basically the weakness in the Canadian dollar is really just the flip-side of that, the strength we're seeing in the U.S. dollar and concerns over global sovereign risk," said Doug Porter, deputy chief economist at BMO Capital Markets.
"I think it is a little ironic given that Canada does have some of the soundest fiscal fundamentals out there but nonetheless it seems that investors are continuing to gravitate towards the U.S. dollar," he said.
Overnight, the Canadian currency hit a session high of C$1.0657, or 93.84 U.S. cents, as appetite for risk was spurred by comments by U.S. Treasury Secretary Timothy Geithner that the danger the U.S. economy will slip back into recession is lower now than at any time in the past year. [ID:nN06139564]
But gains were pared by disappointment that the weekend Group of Seven meeting did not lead to concrete action to tackle the sovereign debt problems of Greece, Portugal and Spain. [ID:nLDE6171HK]
Porter added that the debt contagion may be spreading to more important European nations and maybe even to some larger countries beyond Europe that have large budget deficits and heavy debt.
"It's going to take a lot of effort and a lot of time to rein in these budget deficits," he said.
"It's not something that an official statement or a change in policy can really soothe investors quickly."
The Canadian dollar finished at C$1.0745 to the U.S. dollar, or 93.07 U.S. cents, down from Friday's close of C$1.0700, or 93.46 U.S. cents.
Canada's commodity-linked currency did not seem to benefit from an uptick in oil prices, which rose nearly 1 percent after three sessions of losses. [O/R]
BONDGS EDGE HIGHER
Most Canadian bond prices were slightly higher, benefiting from the flight to safety that pulled stock markets lower on Monday.
U.S. Treasury debt prices, however, fell ahead of new supply, although losses were limited as worries persisted over the soundness of some European countries' debt.
"It's a relatively small difference but perhaps some of these concerns over sovereign risk are actually seeping in the longer end of the U.S. Treasury market, because the U.S. does have a bit of a serious budget deficit issue itself to deal with," Porter said.
The two-year bondrose 1 Canadian cent to C$100.505 to yield 1.250 percent, while the 10-year bond was up Canadian cents at C$103.190 to yield 3.348 percent. (Reporting by Claire Sibonney; Editing by Peter Galloway)
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