* 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 percent. 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 percent.