* Canadian dollar tops 83 U.S. cents
* Improved sentiment sparks surge in C$
* Bond prices higher across the curve (Adds details on bond market)
By Frank Pingue
TORONTO, April 29 (Reuters) - The Canadian dollar shot to its highest level in nearly two weeks on Wednesday morning, helped by a rise in the price of oil, a key Canadian export, and some signs of improved economic sentiment.
The surge in the Canadian dollar followed similar moves by other commodity-linked currencies like the Australian and New Zealand dollars and reclaimed the ground lost earlier this week when the outbreak of the swine flu virus raised concerns about the possible economic impact.
The Canadian dollar rose as high as C$1.2010 to the U.S. dollar, or 83.26 U.S. cents, which marked its highest level since April 16.
That rally was also aided by an improved appetite for risk after data showed a stronger-than-expected rebound in euro zone economic sentiment in April. [ID:nLT148975]
By 9:00 a.m. (1300 GMT) the Canadian unit had retreated slightly to C$1.2045 to the U.S. dollar, or 83.02 U.S. cents, but remained well up from C$1.2205 to the U.S. dollar, or 81.93 U.S. cents, at Tuesday's close.
"The slowdown is running out of momentum, sentiment is starting to improve ... so a lot of these things are feeding off each other," said David Watt, senior currency strategist at RBC Capital Markets.
"People aren't afraid to get long risk right now and anything that is sensitive to risk is doing relatively well."
Oil prices climbed back above $50 per barrel, given the rise in global stocks markets and expectations that the U.S. economic slowdown may be less brutal than initially thought. [ID:nSP459932]
BONDS PRICES HIGHER
Canadian bond prices were slightly higher across the curve alongside the bigger U.S. Treasury market after U.S. data showed the economy shrank more than expected during the first quarter. [ID:nLT885408]
The rise in bond prices came on the heels of a drop during Tuesday's session when a U.S. consumer confidence reading dented the safe-haven appeal of government bonds while supply concerns also weighed. [ID:nN28334543]
The two-year Canada bond was up 2 Canadian cents at C$100.57 to yield 0.975 percent, while the 10-year rose 12 Canadian cents to C$106.07 to yield 3.046 percent.
The 30-year bond was up 10 Canadian cents at C$120.80 to yield 3.790 percent. In the United States, the 30-year Treasury yielded 3.944 percent. (Editing by Jeffrey Hodgson)