* C$ rises to highest level since Oct. 2008
* Increased risk appetite drives C$ gain
* Bond prices up across the curve
By Frank Pingue
TORONTO, Oct 7 (Reuters) - Canada's currency rose against the U.S. dollar early on Wednesday as an improved outlook on the global economy helped boosted risk appetite and prices for key domestic exports like oil and gold.
The upbeat tone spilled over from Tuesday when the Reserve Bank of Australia raised its interest rate, becoming the first central bank in the Group of 20 nations to tighten policy as the financial crisis abates. [ID:nSYD520296]
Talk that the global economy is recovering and will boost demand for commodities helped to lift oil prices above $71 a barrel and gold to a record high above $1,048 an ounce. [O/L] [GOL/]
That all helped to send the Canadian dollar to C$1.0526 to the U.S. dollar, or 95.00 U.S. cents, which marked its highest level since Oct 1, 2008.
"It's continued risk appetite, and the currency isn't moving alone, it's in line with the other commodity-based currencies," said Matthew Strauss, senior currency strategist RBC Capital Markets. "It's mostly spillover of yesterday's optimism after the rate hike that was taken as further indication that the global recovery is becoming more entrenched."
At 7:35 a.m. (1135 GMT), the Canadian unit was at C$1.0568 to the U.S. dollar, or 94.63 U.S. cents, up from C$1.0596 to the U.S. dollar, or 94.38 U.S. cents, at Tuesday's close.
Domestic bond prices were higher across the curve, taking their cue from the bigger U.S. Treasury market.
No Canadian data is due out until Thursday's housing starts report, which is expected to show the number of groundbreakings fell to a seasonally adjusted annualized rate of 148,000 in September from 150,400 in August. (Editing by Padraic Cassidy)