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* C$ up at C$1.0505 to the U.S. dollar
* Bonds prices drift lower on supply concerns
By Jennifer Kwan
TORONTO, Dec 10 (Reuters) - The Canadian dollar rose against the U.S. currency on Thursday, boosted by firm oil prices and signs that U.S. stocks will rise at the open as investors thirst for risk returns.
Oil, a key Canadian export, rose 0,5 percent to about $71 a barrel after falling more than 2 percent in the previous session, supported by a limp dollar and rising equities [O/R] [MKTS/GLOB]. U.S. stock index futures gained ahead of the release of weekly initial jobless claims. [.N]
"It's a risk-on day," said Steve Butler, director of foreign exchange trading at Scotia Capital. "We probably have been a little oversold."
At 7:41 a.m. (1241 GMT), the Canadian dollar CAD= was at C$1.0505 to the U.S. dollar, or 95.19 U.S. cents, up from Wednesday's finish at C$1.0545 to the U.S. dollar, or 94.83 U.S. cents.
Butler said the currency could also follow the lead of other commodity-linked currencies such as the Australian and New Zealand dollars, which rose sharply on growing expectations of higher interest rates.
Strong Australian jobs data fueled anticipation that rates will rise further in Australia and the Reserve Bank of New Zealand signaled its rates may rise sooner than thought. [FRX/]
Canadian bond prices followed U.S. Treasuries lower on supply concerns after a weak 10-year debt auction in the previous session and as investors braced for more longer-dated supply on Thursday. (Reporting by Jennifer Kwan; editing by Jeffrey Benkoe)