* C$ ends at 97.41 U.S. cents
* Canada growth below forecasts, rates likely on hold
* Bonds track U.S. Treasuries higher in safe haven bid (Updates to close, adds quote)
By Jennifer Kwan
TORONTO, Nov 30 (Reuters) - The Canadian dollar fell to a one-month low on Tuesday, pressured by concerns about euro zone debt and weak domestic growth data that suggested the Bank of Canada will be in no rush to raise interest rates.
The euro slumped to 2-1/2-month lows against the U.S. dollar as fears about euro zone sovereign debt prompted widespread risk aversion. The U.S. dollar rose broadly, boosted by safe-haven flows and recent evidence of an improving U.S. economy. [FRX/]
"The drivers ... continue to be macro issues. As the U.S. dollar rises all currencies weaken against it, including Canada," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Also weighing on the market, figures on Tuesday showed Canada's economy notched its weakest growth rate in a year in the third quarter, while the economy shrank outright in September. [ID:nN30202447]
Gross domestic product growth slowed to a 1.0 percent annual rate in the July-September period because of declining exports and a housing downturn. In September, GDP contracted 0.1 percent from August.
The median forecast of analysts was for 1.4 percent annualized growth in the quarter and September growth of 0.1 percent.
The weak data helped send the Canadian dollar CAD=D4 to a session low of C$1.0286 to the U.S. dollar, or 97.22 U.S. cents, its lowest level since Oct. 28 and down nearly a cent from C$1.0186 to the U.S. dollar, or 98.17 U.S. cents, at Monday's close.
The currency finished the North American day at C$1.0266 to the greenback, or 97.41 U.S. cents. It fell 0.6 percent on the month, the first monthly drop in three months.
Canada's currency, which traded at par with the U.S. dollar just weeks ago, will struggle to revisit those highs after the surprisingly weak growth data killed the prospect of any near-term Bank of Canada rate hike. [ID:N30264785]
Spitz said markets will next scrutinize Friday's Canadian and U.S. jobs data. [ECON/CA] [ECON/US]
"Where the bank is more concerned would be on inflation and jobs. It's their mandate ... to keep an accommodative monetary policy until the economy starts to pick up. It's best measured through jobs and inflation," Spitz said.
He added the Canadian currency breached a key technical level on Tuesday of C$1.0260 to the U.S. dollar.
"Pushing through it now does open the market from a technical perspective (for the U.S. dollar) to test higher," he said, noting the next key level being the 200-day moving average of C$1.0292.
Canadian government bonds tracked U.S. Treasuries higher in a flight-to-safety bid that was augmented by the GDP data.
The two-year government of Canada bond CA2YT=RR was up 9 Canadian cents to yield 1.610 percent, while the 10-year bond CA10YT=RR rose 13 Canadian cents to yield 3.069 percent.
Canadian bonds mostly underperformed U.S. Treasuries across the curve. The Canadian 10-year bond CA10YT=RR was 29.5 basis points above the U.S. 10-year yield, compared with about 26 basis points above on Monday. (Reporting by Jennifer Kwan; editing by Peter Galloway)