CANADA FX DEBT-C$ firms to 3-year high as oil up, US$ down

   * 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)