* Euro struggles on report Greece wants to amend EU deal
* Aussie rallies after RBA raises rates, flags more hikes
* Canadian dollar hits parity with U.S. unit (Adds comment, details)
By Wanfeng Zhou
NEW YORK, April 6 (Reuters) - The euro fell broadly on Tuesday after reports that Greece wants to amend a European Union aid deal rekindled worries over Athens' deficit problems.
The Canadian dollar rose to parity with the U.S. currency, hitting its strongest level since July 2008, boosted by rising commodity prices and expectations for higher domestic interest rates. See take a look, [ID:nLDE6350YK]
Media reports said Greece wanted to bypass an International Monetary Fund financial contribution as part of an EU deal struck last month and that Greek banks were being hit as big depositors move cash overseas. For more see [ID:nSGE635017].
A sell-off in the euro helped lift the U.S. dollar, which was also supported by recent solid U.S. economic data and growing expectations the Federal Reserve would tighten monetary policy sooner rather than later.
"The euro is getting trashed as the full market comes back," said Andrew Busch, global FX strategist at BMO Capital Markets in Chicago. "The series of negative articles on Greece coupled with a strengthening U.S. economy is putting the hurt on the currency."
While Greece denied it was seeking to renegotiate the
EU-IMF safety net agreement, this did little to quell
investors' concern and the yield spread between 10-year Greek
and German government bonds
In midday trading, the euro
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. Late last month it announced plans to sell a dollar bond at the end of April.
For an analysis of euro zone dollar issuance, see [ID:nLDE6300AA]
The euro has fallen 6.5 percent so far this year on worries over Greece's debt woes. James Chen, chief technical strategist at FX Solutions, said the the next downside support target for euro/dollar is around $1.3266, which marks the 10-month low set in late March. A break below that level could see the pair fall toward $1.3100, he added.
AUSSIE, CANADIAN DOLLARS GAIN
Against a basket of currencies, the ICE Futures U.S. dollar index <.DXY> rose 0.4 percent to 81.446.
Later in the session, the Federal Reserve is slated to release the minutes from its March monetary policy meeting.
Against the yen
The Australian dollar
Gains in the Aussie and rising oil prices helped the
Canadian dollar
Fergal Smith, managing market strategist, Canada at Action Economics in Toronto, said improving economic fundamentals could lift the Canadian dollar to 0.98 versus the greenback.
"The pressure will remain on the (the Bank of Canada) to turn more hawkish at its next policy announcement," he said.
Concerns over high UK debt levels weighed on sterling. It
lost 0.4 percent to $1.5228
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. [ID:nSGE6350GP]
Dollar/yuan six-month offshore forwards