* C$ rises to 93.64 U.S. cents
* Bonds fall on Greece bailout speculation
TORONTO, Feb 9 (Reuters) - Canada's currency firmed against the U.S. dollar on Tuesday as risk appetite was whetted by reports of European rescue efforts for debt-strapped Greece.
Markets were jittery over a flurry of headlines throughout the day. They included European Central Bank President Jean-Claude Trichet cutting short a trip to Australia to attend a special European Union summit, and rumors, later denied, that Germany was mulling a bailout package for Greece.
Reuters reported euro zone governments have decided in principle to help Greece in what would be the first rescue of a euro zone member in the currency's 11-year history. [ID: nSGE61801C]
"The market has been chasing its tail back and forth, one moment it's risk-on, one moment it's risk-off," said Steve Butler, director of foreign exchange trading at Scotia Capital.
"I'm not sure if it's going to be a bailout or not but that seems to have taken a little bit of heat off the markets and we've had a bit of a relief rally, especially in the equity markets today."
The Canadian dollar closed at C$1.0679, or 93.64 U.S. cents, up from C$1.0745 to the U.S. dollar, or 93.07 U.S. cents, at Monday's close. At one point during the North American session, conflicting bailout reports and subsequent risk aversion pulled the Canadian dollar as low as C$1.0775, or 92.81 U.S. cents.
The euro, the currency at the center of the euro zone's debt woes, was a main factor in driving the U.S. dollar lower, as it was on track for its best one-day gain since November.
Butler said investors are now looking for reassurance from an informal summit of EU leaders on Thursday.
Also supporting Canada's commodity-linked dollar were firmer oil prices, which rose above $73 a barrel, and a 1 percent gain in gold prices. [O/R] [GOL/]
EQUITIES UP, BONDS DOWN
Canadian bond prices, mirroring U.S. Treasuries, were lower across the curve on rising risk sentiment as global stocks rallied.
The two-year bondfell 7 Canadian cents to C$100.435 to yield 1.284 percent, while the 10-year bond lost 32 Canadian cents to C$102.87 to yield 3.387 percent. (Reporting by Claire Sibonney; editing by Peter Galloway)
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