* C$ falls to 99.82 U.S. cents
* Touched highest level since April before falling
* Crisis erupts in Ireland, pushing its bond spreads out
TORONTO, Nov 11 (Reuters) - The Canadian dollar softened against the greenback on Thursday after touching its highest level since April as fresh euro zone debt woes eroded investor appetite for peripheral currencies.
The yield spread between 10-year Irish and German government bonds shot out to its widest ever as investors remain unconvinced that Dublin will be able to carry out drastic austerity measures to ensure it can repay its debts, sending the euro lower against the U.S. dollar.
The prospect of a fresh European debt crisis prompted many investors to dump riskier assets and move their capital back into U.S. dollars.
"We're really being dragged around by general (U.S.) dollar direction more than anything specifically Canadian which to a large degree is being driven by euro/dollar," said Adam Cole, global head of FX strategy at RBC Capital Markets.
Cole noted that trading was light due to Canada's Remembrance Day and U.S. Veteran's Day holidays, which have closed bond markets.
"Moves are really being exaggerated by the fact that most people in North America are on holiday so liquidity is at a bit of a premium. That's inducing a bit of volatility despite there being very little news around."
The Group of 20 meeting in South Korea -- which is trying to sort out disagreements over currency policy -- produced little market direction as leaders struggled to agree on meaningful action to rebuild the global economy as the crisis erupted in Ireland. [ID:nN10121378]
At 9:20 a.m. (1520 GMT), the Canadian dollar stood at C$1.0018 to the U.S. dollar, or 99.82 U.S. cents, down from its finish exactly at par on Wednesday.
Earlier the currency had been supported by reports of strong Chinese growth, which boosted commodity prices. Overnight, the Canadian dollarhit a session high of 99.77 Canadian cents to the U.S. dollar, or $1.002, its highest level since April.
The day's range for the currency is expected to hold between 99.80 Canadian cents to the U.S. dollar, or $1.002, and C$1.01 to the U.S. dollar, or 99.01 U.S. cents, said Cole.
"I can't really see a short-term catalyst (for parity) but it's probably only a question of time before we do because the fundamental backdrop in Canada is still a very strong one." (Reporting by Claire Sibonney; editing by Jeffrey Hodgson)
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