* Canadian dollar up on rising risk appetite, oil weighs
* Bonds flat to lower as stocks gain; U.S. supply eyed
* Market focus on Friday's trade, employment data
TORONTO, March 11 (Reuters) - The Canadian dollar climbed against the U.S. dollar on Wednesday morning as the market gained confidence in taking on a little more risk but the upside was limited by trepidation ahead of key economic data at the end of the week and by slipping crude oil prices.
The price of oil, which often helps determine the direction of the Canadian dollar because it is a key Canadian export, fell below $45 a barrel after a two-day rally.
The U.S. dollar's recent rally seemed to run out of steam as European and North American stock markets extended Tuesday's rise and encouraged buying of other currencies. [ID:FRX/]
At 10:42 a.m. (1442 GMT), the Canadian currency was at C$1.2785 to the U.S. dollar, or 78.22 U.S. cents, up from C$1.2852 to the U.S. dollar, or 77.81 U.S. cents, at Tuesday's close.
"With equities higher we see the (U.S.) dollar weaker against all currencies, including Canada. But the Canadian dollar itself is lagging due to the data risks that are upcoming this Friday," said Jack Spitz, managing director of foreign exchange at National Bank Financial Group.
"Add to that the fact that commodities are posting losses, led by crude. Little help from commodities at the moment and the data risks are going to undermine any big gains to the Canadian dollar."
The Canadian economic calendar is bare until Friday when two top monthly statistics, jobs and trade, are released. There is little doubt among market players that the numbers will reinforce views that the economy is under great strain.
A Reuters survey found analysts expect the economy to have shed 52,500 jobs in February after a drop of 129,000 jobs in January.
Canadian trade data for January is expected to show the deficit more than doubled to C$1 billion from $460 million in December.
The currency has had a volatile week so far, mostly on the swiftly changing appetite for risk. The Canadian dollar hit a high at C$1.2725 to the U.S. dollar, or 78.59 U.S. cents, on Tuesday, rebounding from the September 2004 low it touched at C$1.3066 to the U.S. dollar, or 76.53 U.S. cents, on Monday.
On Wednesday it has ranged between C$1.2751 and C$1.2875.
Canadian bond prices were flat to lower as market players awaited the next wave of U.S. supply and as North American stocks were stronger.
The appeal of the safe haven government debt is often curbed when riskier assets, such as stocks, are favored.
Some $63 billion in U.S. government notes and bonds were due to hit the market this week, with about half of it meeting with solid demand on Tuesday. An auction of 10-year notes is on tap on Wednesday.
The two-year bond dipped 2 Canadian cents to C$103.00 to yield 0.990 percent. The 10-year bond was off 3 Canadian cents at C$106.55 to yield 3.000 percent.
The 30-year bond was unchanged at C$122.45 to yield 3.710 percent. The U.S. 30-year bond yielded 3.735 percent. (Reporting by Ka Yan Ng; Editing by Peter Galloway)