* Euro struggles on report Greece wants to amend EU deal
* Fed minutes suggest rates could stay low for some time
* Aussie rallies after RBA raises rates, flags more hikes
* Canadian dollar hits parity with U.S. unit
(Adds comment, details of Fed meeting minutes, changes
byline)
By Steven C. Johnson
NEW YORK, April 6 (Reuters) - The euro fell on Tuesday as
reports that Greece wanted to amend a European Union aid deal
rekindled fear about its ability to resolve its debt crisis.
The surging Canadian dollar, meanwhile, hit parity with its
U.S counterpart for the first time since mid-2008 as rising
commodity prices boosted the outlook for higher Canadian
interest rates. For more, see []
U.S. interest rates, on the other hand, could stay low for
even longer than investors have been anticipating, minutes from
the Federal Reserve's last meeting showed. That helped the
Australian dollar, whose central bank raised interest rates on
Tuesday, to its highest against the greenback since January.
The euro was the day's biggest mover, though, shedding
nearly 1 percent and dipping below $1.34 after media reported
Greece wanted to renegotiate a joint EU-International Monetary
Fund aid deal reached last month. []
Greek banks were being hit as big depositors moved cash
overseas, and the euro fell as investors ditched Greek assets,
pushing up the risk premium on Greek government bonds.
Greece denied the reports, but this did little to quell
concern. The yield spread between 10-year Greek and German
government bonds at one point exceeded 4 percentage points, the
widest since the euro's launch.<GR10YT=TWEB><EU10YT=TWEB>
"There is no doubt that the Greek financing story continues
to plague the euro," said Boris Schlossberg, director of
research at GFT Forex in New York.
If Greece has trouble selling debt in the coming weeks, he
said the euro could fall further on renewed "concerns over the
viability of monetary union."
The euro fell against the dollar for a third straight day,
dropping 0.7 percent to $1.3385 <EUR=>. It has fallen 6.5
percent so far this year against the dollar. The euro was also
down 1.3 percent at 125.48 yen <EURJPY=>, while the dollar fell
0.6 percent to 93.72 yen <JPY=>.
Greece needs to sell more bonds to meet its funding needs.
It has raised about 23 billion euros of a projected 2010
requirement of 53.2 billion euros. Last month, it announced
plans to sell a dollar bond at the end of April.
FED ON GUARD, CANADIAN, AUSSIE DOLLARS GAIN
The dollar wobbled a bit after minutes showed the Fed was
still nursing some concerns about the U.S. economy and in no
hurry to raise rates from record lows. []
Though it only pared gains against the euro, the dollar
lost ground against currencies where interest rates have either
already risen or are expected to rise soon.
The Canadian dollar rose to C$0.9988 per U.S. dollar,
breaking parity for the first time since July 2008, before
easing to C$1.0009 per greenback, little changed from Monday.
Fergal Smith, market strategist for Canada at Action
Economics in Toronto, said the loonie could rise as high as
C$0.98 per U.S. dollar as Canada's economic outlook improves
and markets gear up for tighter monetary policy.
"The pressure will remain on (the Bank of Canada) to turn
more hawkish at its next policy announcement," he said.
The Reserve Bank of Australia is already well into its own
tightening policy, and its move to hike the cash rate to 4.25
percent pushed the Australian dollar <AUD=D4> to $0.9281, its
highest since January. []
Concerns over high UK debt levels weighed on sterling. It
lost 0.3 percent to $1.5238 <GBP=D4> as British Prime Minister
Gordon Brown called an election for May 6, heightening
political uncertainty. []
The market was also watching the yuan after U.S. Treasury
Secretary Timothy Geithner said he was confident that China
would see that it is in its own interest to make its currency
more flexible. []
Dollar/yuan six-month offshore forwards <CNY6MNDFOR=> fell
to their lowest since August 2008 on Tuesday, implying greater
future yuan appreciation. []
(Additional reporting by Wanfeng Zhou; Editing by Chizu
Nomiyama)
