* Euro falls broadly on widening Greek/German yield spreads
* Greek debt issues in focus ahead of EU/IMF aid talks
* Canada dollar at 22-mth high vs US dollar on rate outlook
(Releads, updates throughout)
By Naomi Tajitsu and Neal Armstrong
LONDON, April 21 (Reuters) - The euro fell broadly on Wednesday, relinquishing earlier gains, as a rise in the premium demanded to buy Greek bonds highlighted uncertainty about how Athens would resolve its debt problems.
The euro hit a two-week low against the dollar, stung by a widening in the Greek/German government bond yield spread beyond 500 basis points as talks began in Greece with the European Union and International Monetary Fund on a bailout package. [ID:nLDE63J18U]
The cost of insuring against a Greek default climbed to a record high. Greece is widely expected to request up to 30 billion in emergency aid from the euro zone and IMF.
Germany's economy minister said IMF aid could amount to 12 billion euros, in line with estimates, but added aid should wait until the effects of Greece's austerity measures were seen, underlining the uncertainty that hangs over the issue. [ID:nBAT005318]
"The FX market is nervous about widening sovereign spreads. The German minister's comments on Greece look to be driving it," said Paul Robson, currency strategist at RBS.
By 1136 GMT, the euro
Losses in the euro helped to boost the dollar as worries about Greece increased the appeal of the U.S. currency, seen as a safe haven. Against a currency basket <.DXY>, it recovered from the day's low to trade 0.3 percent higher at 81.289.
But the dollar
The yen recovered from broad losses as the Greek debt crisis took centre stage. Earlier in the day, it came under selling pressure as strong U.S. earnings boosted risk appetite, although this dissipated during the European session.
The market awaited a raft of first-quarter earnings reports
from AT&T, McDonald's, Starbucks and other U.S. corporates.
Apple Inc
CANADA DOLLAR SHINES
The Canadian dollar
The Canadian currency extended its rally from Tuesday, when the Bank of Canada signalled an interest rate rise may come as early as June. Stronger commodity prices also provided a boost.
"The Canadian dollar is rallying after the BoC dropped its conditional commitment not to move on rates," said Adam Cole, global head of FX strategy at RBC Capital Markets.
"We have a near-term target versus the U.S. dollar of C$0.9800 and expect that to be reached pretty quickly," he said.
It was also on the cusp of an 18-month high against the yen
The Swedish crown
(Editing by Nigel Stephenson)