* C$ rises to three-year high at $1.0344
* Bonds mildly firmer in safe-haven play
* Canada to auction C$3 bln in two-year notes
TORONTO, March 9 (Reuters) - The Canadian dollar broke through the C$0.97 barrier against the U.S. dollar on Wednesday morning and hit its highest level since November 2007, spurred by a broad greenback selloff and underpinned by firm equity and commodity markets.
The commodity-linked Canadian dollar -- which often reacts to oil prices because of the country's large oil exports -- rose as high as C$0.9667 to the U.S. dollar, or $1.0344, as the price of oil remained buoyant.
Crude rose as fighting intensified in Libya and an OPEC delegate said the group saw no need to hold an emergency meeting to ease supply fears. [O/R]
At 9:20 a.m. (1420 GMT), the Canadian dollar CAD=D4 was at C$0.9684 to the U.S. dollar, or $1.0326, up from C$0.9714 to the U.S. dollar, or $1.0294, at Tuesday's North American session close. [FRX/]
George Davis, chief technical strategist at RBC Capital Markets, said the broad weakness in the U.S. dollar was the main reason for the Canadian currency's advance.
"The secondary factor that can't be ignored continues to be the commodity markets. With the unrest and the uncertainty in the Middle East, crude oil prices remain at elevated levels and near their more recent highs."
Equity markets, a risk barometer that the Canadian dollar also typically tracks, have been relatively resilient despite the upheaval in Libya and lingering concerns about the sovereign debt problems of some euro-zone nations.
While near-term market direction centers on the price of oil, two sets of Canadian data this week may help firm up the market's thinking on the timing of interest rate hikes in Canada.
Market players will be searching for evidence that the Canadian economy recovery has momentum when they look at the January trade and February jobs figures that are due on Thursday and Friday, respectively. ECONCA
Canadian government bonds prices were marginally firmer across the curve on Wednesday morning, mirroring U.S. Treasuries, in a mild safe-haven play on worries over the Libyan conflict and the euro zone debt crisis.
The two-year bond CA2YT=RR was up 2 Canadian cents to yield 1.872 percent, while the 10-year bond CA10YT=RR rose 6 Canadian cents to yield 3.392 percent.
Canada will auction C$3 billion of two-year notes at midday. BOCBOND (Reporting by Ka Yan Ng; editing by Peter Galloway)