* 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
* Bond prices mixed
By Andrea Hopkins
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, continued.
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 aversion.
At 11:24 a.m. (1524 GMT), the Canadian dollar CAD=D3 was 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. cents.
"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$1.0855," John Curran, senior vice president at CanadianForex, a commercial foreign exchange dealing firm, said in a research note.
"Canadian employment data out on Friday may temporarily stem the tide of C$ 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 Greece.
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 banking system.
"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 territory.
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 bond CA2YT=RR was down 3.5 Canadian cents to yield 0.856 percent, while the 10-year bond CA10YT=RR gained 15 Canadian cents to yield 2.045 percent. (Editing by Chizu Nomiyama and Peter Galloway)