* Currency ends at C$1.0186 vs US$ * 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 closed stronger 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. "Clearly a move higher in crude oil pricing is going to have some impact on the Canadian dollar. It would contribute to better offers in dollar/Canada, but it wouldn't be the sole reason," said Jack Spitz, managing director of foreign exchange at National Bank. "Attribute much of the price action to the spillover effects of stop-losses being traded in euro/Canada. The market has been selling euro and buying Canada." Spitz added that because the Canadian dollar has the stronger fundamentals of the two currencies, he expects to see more selling of the euro against it. The Canadian dollar closed 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. 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 world economy prompted investors to drive the U.S. dollar to two-year high against the euro. Global equities and commodities also weakened as concerns over the troubles in the euro zone, softer 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. RALLY AGAINST AUSSIE DOLLAR Data showing an unexpected drop in Australian employment in June also added to worries about world growth, causing the higher-yielding Australian dollar to fall sharply. The Aussie dollar touched a two-week low against the Canadian dollar of C$1.0319, or 96.91 Australian cents. "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. 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 47 Canadian cents to yield 1.633 percent.