* C$0.9912 vs US$, or $1.0089
* Carney speech as expected, no dollar reaction
* Focus still on Europe, Fed
* Bond prices lower
By Andrea Hopkins
TORONTO, Sept 20 (Reuters) - The Canadian dollar remained slightly weaker against its U.S. counterpart on Tuesday afternoon, weighed down by worries over Europe and unaffected by a dovish speech by the Bank of Canada chief.
The euro edged slightly higher as investors stayed cautious on the currency and as Greece's ability to avoid default was still a wild card. [FRX]
But global stock markets rose and crude oil jumped on expectations the U.S. Federal Reserve will act to boost the U.S. economy as it opened a two-day policy meeting, and as investors shrugged off Italy's credit downgrade and other sour news. [MKTS/GLOB]
A dovish speech by Bank of Canada Governor Mark Carney was largely as expected and had little impact on Canadian markets.
"We are still very much in a range and I think that just reflects the fact that investors are still primarily concerned with events in Europe and that is the most important policy implication even on Canada, at least through financial market channels," said David Tulk, chief Canada macro strategist at TD Securities.
"From that perspective it would take a lot for Governor Carney to move the Canadian dollar, just because everyone is so uniquely focused on Europe today and looking ahead to the Federal Reserve tomorrow."
The Canadian dollar held steady at weaker levels against its U.S. counterpart after Carney's speech and news conference.
At 2:01 p.m. (1901 GMT), the Canadian dollar CAD=D4 stood at C$0.9912 to the U.S. dollar, or $1.0089 U.S. cents, down slightly from Monday's North American session close of C$0.9897 to the U.S. dollar, or $1.0104.
Carney said external shocks are adding downside risks to the Canadian economy, with euro zone fiscal funding challenges affecting near-term confidence. [ID:nS1E78J116].
The tone of the speech matched the cautious stance the bank has taken lately.
"He's basically preaching the same type of view that the international outlook is quite bleak and conditions are slightly more constructive within Canada, but ultimately there is only a limited window in which Canada can outperform its international peers," Tulk said.
"Our view is that they would prefer to keep the policy rate lower for longer and let fiscal stimulus provide any support in the event the economy needs it."
Bond prices were lower across the curve.
The two-year bond CA2YT=RR was down 2.5 Canadian cents to yield 0.946 percent, while the 10-year bond CA10YT=RR was down 20 Canadian cents to yield 2.207 percent. (Editing by Peter Galloway)