* C$ rises to finish at C$1.1518 to the U.S. dollar
* Bank of Canada surveys offer support
* North American stock market rises also boost C$
* Bonds lower across curve (Adds details, quotes)
By Jennifer Kwan
TORONTO, July 13 (Reuters) - Canada's dollar strengthened against the greenback on Monday, helped by rallying equity markets and a pair of Bank of Canada surveys that showed signs of improved business sentiment.
Lending conditions in Canada continued to tighten in the second quarter, according to the central bank surveys of businesses and senior loan officers, but the number of respondents pointing to tighter conditions declined and signals of business conditions brightened. [ID:nN13381629]
The surveys seemed to reinforce other data suggesting the recession may have hit bottom, and that companies may face fewer hurdles in getting financing in coming quarters.
"In general, given the positive aspects of those reports we have seen some interest to buy Canadian dollars," said George Davis, chief technical strategist at RBC Capital Markets.
Another factor helping the currency higher was a rally in Toronto's main stock index, which bounced off a steep drop in early action and finished up 1.5 percent after a prominent U.S. banking analyst upgraded Goldman Sachs Group (GS.N), boosting financial shares in Canada as well as the United States. [ID:nN13211783]
"There's a return of risk appetite," said Sal Guatieri, senior economist BMO Capital Markets.
"Investors are buying equities and taking another look at some of the second-tier currencies, so that's helping the Canadian dollar."
The Canadian unit finished at C$1.1518 to the U.S. dollar, or 86.82 U.S. cents, up from C$1.1647 to the U.S. dollar, or 85.86 U.S. cents, at Friday's close.
The Canadian dollar may have risen further if not for a drop in prices oil, a key Canadian export, which settled below $60 a barrel on concerns over the state of the global economy. [ID:nSYD73698]
BONDS LOWER ACROSS THE CURVE
Canadian bond prices were lower across the curve as money flowed out of safe-haven investments, mirroring the U.S. Treasury debt market, where prices also dropped. [ID:nN13582348]
"The bond markets are under pressure because of the renewed risk appetite for equities," Guatieri said.
The two-year Canada bond was down 4 Canadian cents at C$100.13 to yield 1.182 percent, while the 10-year bond fell 33 Canadian cents to C$103.62 to yield 3.317 percent.
The 30-year bond dropped 75 Canadian cents to C$118.55 to yield 3.902 percent. In the United States, the 30-year Treasury yielded 4.2432 percent.
Canadian bonds mostly outperformed U.S. Treasuries across the curve. The Canadian 30-year bond was 34 basis points below the U.S. 30-year yield, compared with about 33 basis points below on Friday. (Reporting by Jennifer Kwan; editing by Peter Galloway)