* C$ firmer vs US$, rallies on crosses * Gains mirror rise in oil price * Bond prices climb across curve By Claire Sibonney TORONTO, July 12 (Reuters) - Canada's dollar recovered from a near two-week low against its U.S. counterpart and hit a record high against the euro on Thursday, helped by gains in oil prices on supply fears. Brent crude futures turned higher in late trading, jumping above $101 a barrel, after the United States announced increased sanctions against Iran, quashing sharp losses sparked by global economic growth worries. Global equities and commodities were still mostly weaker however, as concerns over global growth and dimmed expectations for any new near-term stimulus response by the U.S. Federal Reserve sapped investor appetite for riskier assets and boosted the greenback. A surprise rate cut in South Korea on Thursday following a 50-basis-point cut by Brazil on Wednesday evening underscored the widespread nature of the current slowdown, even though the Bank of Japan bucked the global trend and held off on further policy easing. Data showing an unexpected drop in Australian employment in June also added to worries about world growth, increasing risk aversion and causing the higher-yielding Australian dollar to fall sharply. The Aussie dollar touched a two-week low against the Canadian dollar at C$1.0325, its commodity-linked counterpart. "There's a bit of nuance at least in the dollar bloc where the Australian dollar is weakening off the back of the sharply negative employment report," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. At 3:03 p.m. (1903 GMT), the Canadian dollar stood at C$1.0186 versus the U.S. dollar, or 98.17 U.S. cents, slightly firmer than Wednesday's North American session close at C$1.0199 versus the U.S. dollar, or 98.05 U.S. cents. Earlier, the domestic currency fell as far as C$1.0251, or 97.55 U.S. cents, its weakest level since June 29. RECORD HIGH AGAINST EURO Against the euro, the Canadian dollar surged to C$1.2410, or 80.58 euro cents, its strongest level against the single currency since it was created in January, 1999. Adam Cole, global head of FX strategy at RBC Capital Markets in London, noted that it is typical to see the Canadian dollar piggyback on U.S. dollar strength versus other major currencies. "Obviously because of the very close links between Canada and the U.S., it tends to drag CAD with it," he said. Concerns about a slowing global economy prompted investors to drive the U.S. dollar to two-year high against the euro. Looking ahead to Friday, markets are awaiting data on second-quarter gross domestic product from China, which is expected to show one of the few growth engines in the world economy is faltering. Currency traders looking at the Canadian dollar in particular are also gearing up for next week's rate setting announcement by the Bank of Canada for further direction. A Reuters poll showed the Bank of Canada is expected to keep interest rates on hold until the second quarter of 2013, as a slowing global economy hurts the domestic outlook and as Ottawa's new mortgage rules take pressure off the central bank to cool the country's housing market. Canadian bond prices climbed across the curve, mimicking gains by U.S. Treasuries against the flight-to-safety backdrop. The two-year government bond added 5 Canadian cents to yield 0.969 percent, while the benchmark 10-year bond gained 45 Canadian cents to yield 1.635 percent.