* C$1.0620 vs U.S. dollar, or 94.16 U.S cents
* Down more than one cent
* Greek default fears fuel worry about banking crisis
TORONTO, Oct 4 (Reuters) - The Canadian dollar hit 13-month
lows against its U.S. counterpart on Tuesday morning as global
markets sank on the prospect of a Greek debt default, sparking
worries that a European banking crisis could ensue.
Wall Street stocks dropped more than 1 percent as a global
selloff of risk assets, including commodities and
commodity-linked currencies such as the Canadian dollar,
The drop in U.S. stocks pushed them into official bear
market territory, down more than 20 percent from their 2011
high, and U.S. crude oil prices fell to a 2011 low as investors
worried about the economic implications of an increasingly
likely Greek default. [MKTS/GLOB]
With no domestic news and little in the way of recent
trading milestones, analysts said the Canadian dollar was
likely to continue to be swept along by the global wave of risk
At 11:24 a.m. (1524 GMT), the Canadian dollar
at C$1.0620 to the U.S. dollar, or 94.16 U.S. cents, down more
than one Canadian cent from Monday's North American session
close of C$1.0511 to the U.S. dollar, or 95.14 U.S. cents.
That was the weakest level since Sept. 1, 2010, when it
fell as low as C$1.0653 to the U.S. dollar, or 93.87 U.S.
"Several key targets are looming slightly higher at levels,
which, only two weeks ago, would have been considered
ludicrous. Those levels are C$1.0585, C$1.0680, C$1.0755 and
C$1.0855," John Curran, senior vice president at CanadianForex,
a commercial foreign exchange dealing firm, said in a research
"Canadian employment data out on Friday may temporarily
stem the tide of C$ weakness with a strong print but global
growth concerns and European woes still own the spotlight."
Greece appeared more likely to default on its debt after
euro zone finance ministers postponed a vital aid payment to
Athens until mid-November. For details, see [nL5E7L419D].
The impact of a Greek default on the global economy, and
particularly on the banking sector, worried markets after the
EU ministers said they were reviewing the size of
private-sector involvement in a second bailout package for
World stocks hit 15-month lows and the euro fell across the
board as investors chose the relative safety and liquidity of
the U.S. dollar.
Still, traders said Canada's dollar has outperformed many
rivals in recent weeks and still looks relatively strong,
likely benefiting from Canada's resilient economy and strong
"Globally, it just looks like such a meltdown and shunning
of risk that Canada should probably be weaker and is doing
quite well," said Steve Butler, director of foreign exchange
trading at Scotia Capital.
"With complete risk aversion you can't expect to be
gaining, but we are less worse than a lot of others, which
isn't good English, but pretty much sums it up."
The Canadian currency has been hitting new 2011 lows almost
daily since it sank through parity to the U.S. dollar in
September and the Toronto stock market entered bear market
The Canadian dollar has lost more than 6 percent in the
last month, which Butler said is a relatively good performance
next to the 11 percent losses sustained by the Australian, New
Zealand or Mexican currencies in the same period.
"Things don't appear to be quite as bad in Canada as
elsewhere," Butler said. "We've got a fairly solid foundation
in terms of how the Bank (of Canada) has handled things and how
the banking system is, and we've still got, although the
commodities are softer than they were, we've still got a
reasonably decent economic situation going for us."
Bond prices were mixed. The two-year Canadian government
was down 3.5 Canadian cents to yield 0.856
percent, while the 10-year bond gained 15 Canadian
cents to yield 2.045 percent.
(Editing by Chizu Nomiyama and Peter Galloway)