* C$ edges up to 99.00 U.S. cents
* Bonds flat to higher, tracking U.S. Treasuries (Adds details)
TORONTO, Dec 9 (Reuters) - The Canadian dollar firmed slightly against the U.S. currency as recovery hopes perked up on a U.S. labor report that showed new claims for unemployment benefits were lower than expected last week.
The data showed initial claims for state unemployment benefits dropped 17,000 to a seasonally adjusted 421,000, below economists' expectations for 425,000. The four-week moving average slipped to a fresh two-year low. [ID:nN09222654]
The Canadian dollar CAD=D4 rose to session high at C$1.0066 to the U.S. dollar, or 99.34 U.S. cents, before paring gains slightly as stock market indexes and the price of oil also trimmed gains.
At 10:15 a.m. (1515 GMT), the Canadian dollar was at C$1.0101 to the U.S. dollar, or 99.00 U.S. cents, up from Wednesday's close of C$1.0108 to the U.S. dollar, or 98.93 U.S. cents.
"Some of the move started to happen before the claims report, then there was some stability. It's probably broad market moves that are feeding the movement in the Canadian dollar today," said Sacha Tihanyi, currency strategist at Scotia Capital.
"But it really is a restrained day out there."
Still to come in the session, the Bank of Canada is expected to release its Financial System Review later. There was little reaction to Canadian data that showed new home prices edged higher by 0.1 percent in October from September, for the third consecutive gain. [ID:nN0979036]
Key technical ranges in the short term include C$1.0139 to the U.S. dollar, a support level for the Canadian currency, said Matthew Strauss, senior currency strategist at RBC Capital Markets. A key Canadian dollar resistance level is at C$1.0078 to the greenback.
Canadian bond prices were largely flat to higher on Thursday, tracking U.S. Treasuries. Debt prices edged higher as a better than expected bond auction the previous session encouraged buyers to creep back into the market, ending a two-day selloff. [US/]
The two-year bond CA2YT=RR was up 5 Canadian cents to yield 1.666 percent, while the 10-year bond CA10YT=RR was unchanged to yield 3.259 percent. (Reporting by Ka Yan Ng and Jennifer Kwan; editing by Rob Wilson)