* C$ rises to C$1.0035 vs US$, or 99.65 U.S. cents * Follows oil, global markets higher * Bond prices retreat across the curve By Jennifer Kwan TORONTO, July 27 (Reuters) - Canada's dollar soared to its highest level in 10 weeks on Friday on growing expectations the European Central Bank will take action to tackle the region's sovereign debt crisis and hopes of further stimulus by the U.S. Federal Reserve. Market sentiment got an additional boost after the leaders of France and Germany said they are "determined to do everything to protect the euro zone" and its single currency. That echoed comments on Thursday by ECB President Mario Draghi's pledge to do whatever is necessary to protect the euro zone from collapse. "Lots of lip service from the ECB and Europe in general. The markets obviously liking the comments out of there and hoping for some action," said John Curran, senior vice president at CanadianForex. At around 1:45 p.m. (1745 GMT), the Canadian dollar stood at C$1.0041 versus the greenback, or 99.59 U.S. cents, after hitting a high of C$1.0035. On Thursday, it finished the North American session at C$1.0096 against the U.S. dollar, or 99.05 U.S. cents. Curran said the market was also optimistic the U.S. Federal Reserve will move to stimulate the economy after data that showed U.S. economic growth slowed in the second quarter. Top U.S. Federal Reserve officials recently spelled out what measures they might take to boost growth and hiring. Fed action could come as soon as next week, as its policy-setting committee meets Tuesday and Wednesday. "People are looking for, hoping, praying for stimulus from the Fed. That's why the market is adding risk," said Curran. Blake Jespersen, managing director of foreign exchange sales at BMO Capital Markets, said market moves will be largely contained until there is more clarity around Europe. "It's still fairly rangebound, lighter volumes, and I think the market in general is just waiting for more clarity from the ECB in terms of what they have in mind to sustain the euro at whatever cost," added Jespersen. Canadian bond prices moved lower across the curve with the two-year bond off 17 Canadian cents to yield 1.102 percent and the benchmark 10-year bond down C$1.23 Canadian cents lower to yield 1.776 percent.