CANADA FX DEBT-C$ hits one-week high on Europe, GDP

* C$ rises to high of 98.37 U.S. cents
    * Currency rallies along with euro, global stocks
    * Extends gains after stronger April GDP data
    * Bonds prices descend across curve

    By Jennifer Kwan
    TORONTO, June 29 (Reuters) - Canada's dollar rose to a
one-week high on Friday as investors reacted to agreement among
euro zone leaders on some measures to aid the region's debt
crisis, and on stronger-than-expected domestic growth data.
     A rebound in oil output helped deliver surprisingly strong
Canadian economic growth of 0.3 percent in April after two
months of limp readings, according to Statistics Canada data
released on Friday. The market had forecasted growth of 0.2
    Investors were also willing to take on more risk after euro
zone leaders agreed on measures to cut borrowing costs in Spain
and Italy and eventually recapitalize the region's banks.
    "Apparently Europe's been saved," said David Bradley,
director of foreign exchange trading at Scotiabank.
    "It's a risk rally. Everyone's buying risk after what
happened, (and) the comments from Europe. I think this move has
caught a lot of people off guard."
    At around 9:10 a.m. (1310 GMT), the Canadian currency
 was at C$1.0180 to the greenback, or 98.23 U.S. cents,
after embracing a high of C$1.0166, or 98.37 U.S. cents, its
strongest since June 20.
    The Canadian dollar finished Thursday's session at C$1.0328
to the greenback, or 96.82 U.S. cents.
    The currency clawed back from the three-week low it hit on
Thursday on the European summit progress, even though there was
no movement towards common euro zone bonds, which leaders
including Italy's Mario Monti and France's Francois Hollande
have called for.
    Yields on 10-year Spanish and Italian debt retreated and the
common currency rose more than 1 percent.  
    Canada underperformed against most major currencies
including the euro and commodity-linked New Zealand and
Australian dollars.
    Elsewhere, Canadian bond prices were lower across the curve
with the two-year Canadian government bond down 20
Canadian cents to yield 1.053 percent, while the benchmark
10-year bond sank 92 Canadian cents to yield 1.775