* C$ rises to 96.87 U.S. cents
* Bond prices rise across curve
By Claire Sibonney
TORONTO, July 12 (Reuters) - The Canadian dollar extended gains against the greenback on Monday on heightened expectations that the Bank of Canada will raise interest rates again this month following last week's standout employment report.
Data on Friday showed Canada's economy created six times more jobs than forecast in June, contradicting other recent data suggesting the country's galloping economic recovery was slowing. [ID:nN09261751]
"Really it's just a matter of CAD still benefiting on stronger than expected employment," said Camilla Sutton, senior currency strategist at Scotia Capital.
"The market is just excited about potential for the Bank of Canada to hike rates July 20."
In a Reuters poll conducted after the jobs report all of Canada's primary securities dealers predicted that the Bank of Canada would raise interest rates by 25 basis points this month and again in September. But some forecast a pause later this year on uncertainty about the pace of global economic growth. [CA/POLL]
Sutton said the Canadian dollar was outperforming all the other G10 currencies, and that traders will also be watching the Bank of Canada's Business Outlook Survey and the Senior Loan Officer Survey at 10:30 a.m. (1430 GMT) for more anecdotal clues about the economy.
Market participants also awaited second-quarter earnings results from U.S. firms, which kick-off with Alcoa later on Monday. A weak run of economic data has raised speculation the economic recovery may be losing momentum and stung the U.S. dollar.
At 7:55 a.m. (1155 GMT), the Canadian dollar CAD=D4 was at C$1.0323 to the U.S. dollar, or 96.87 U.S. cents, up from Friday's finish at C$1.0337 to the U.S. dollar, or 96.74 U.S. cents.
Sutton said a key level for currency was the 100-day moving average at C$1.0302. "I think dollar/Canada is really in this broader range so if we break through that C$1.03 level that opens up a test down to C$1.0180."
Canadian bond prices advanced, tracking U.S. Treasuries and German Bunds higher, driven by stop-loss buying and as weaker U.S. futures prompted bids for safe-haven government debt.
The two-year government bond CA2YT=RR added 1 Canadian cent to yield 1.714 percent, while the 10-year bond CA10YT=RR gained 12 Canadian cents to yield 3.217 percent. (Editing by Theodore d'Afflisio)