* C$ slips to C$0.9780 to the U.S. dollar, or $1.0225
* Bond prices rise
* Markets reassessing Bank of Canada rate moves
TORONTO, May 24 (Reuters) - The Canadian dollar weakened against the U.S. currency on Tuesday while bond prices rose, as European debt concerns weighed again with a new round of warnings.
Rating agency Moody's said a Greek debt default would put Portugal and Ireland at risk of multi-notch credit downgrades. For details, see [ID:nLDE74N0AQ]
That followed concerns on Monday that a Greek debt default could drag a new group of countries -- including Group of Eight member Italy -- into trouble.
At 8:10 a.m. (1210 GMT), the Canadian dollar CAD=D4 was at C$0.9780 to the U.S. dollar, or $1.0225, down from C$0.9730 to the U.S. dollar, or $1.0277, at Friday's close.
Canadian financial markets were shut Monday for Victoria Day. The currency had traded as low as C$0.9810 to the U.S. dollar, or $1.0194, its lowest in eight weeks, Reuters data showed.
"It's had a few tough days," said Camilla Sutton, chief currency strategist at Scotia Capital. "I think it's really just taking its cue from broader markets."
With no Canadian data due this week, market players will have little else to help shape interest rate expectations ahead of the Bank of Canada's May 31 policy decision.
However, market participants have gradually revised their Bank of Canada interest rates expectations further into the year as data has been patchy and on renewed global growth concerns, sending the currency lower and short-dated bond prices sharply higher.
Canada's two-year bond CA2YT=RR, particularly sensitive to Bank of Canada rate moves, jumped 10 Canadian cents to yield 1.609 percent. The 10-year bond CA10YT=RR rose 12 Canadian cents to yield 3.133 percent.
Overnight index swaps, which trade based on expectations for the central bank's key policy rate, showed traders cut bets on rate hikes at every Bank of Canada announcement date from July to December. BOCWATCH
Almost no one expects the central bank to hike rates at its next policy setting on May 31. [CA/POLL]
"We still have a lot of hurdles ahead, and certainly the volatility we're seeing coming out of Europe right now would be concerning for central banks," said Sutton.
"If you combine that with some evidence of a slower growth trajectory out of Asia and the U.S., it's not particularly positive." (Reporting by Ka Yan Ng; editing by Jeffrey Benkoe)