* C$ down at 96.43 U.S. cents
* BoC survey shows business upbeat but eyeing global risk
* Bond prices rise across curve (Updates to midmorning, recasts, adds quote)
By Jennifer Kwan
TORONTO, July 12 (Reuters) - Canada's dollar fell on Monday morning due to weakness in oil and equity prices despite a pair of Bank of Canada surveys that showed upbeat business sentiment.
The surveys showed businesses were positive in the second quarter on future sales, investment and hiring, but their enthusiasm was tempered by fears that global uncertainties would hurt economic recovery. [ID:nTOE002143]
"It does show some slowing in the momentum of the recovery overall, but there were certainly enough positive aspects here that the main message is that the recovery still seems to be on solid ground at least in Canada," said Doug Porter, deputy chief economist at BMO Capital Markets.
The surveys, however, were not enough to keep the Canadian currency in positive territory as weakness in oil and equity markets -- key gauges of risk appetite -- were softer as investors paused after last week's rallies. [.N] [.TO]
At 11:03 a.m. (1503 GMT), the Canadian dollar CAD=D4 was at C$1.0370 to the U.S. dollar, or 96.43 U.S. cents, down from Friday's finish at C$1.0337 to the U.S. dollar, or 96.74 U.S. cents.
"In general, we had this sharp risk rally last week and that's been fading off a bit," said David Watt, senior currency strategist at RBC Capital Markets, referring to the Canadian dollar's 2.8 percent rise last week.
"Equities are fading off as well," he added.
The Canadian currency touched a session low of C$1.0387 to the U.S. dollar, or 96.27 U.S. cents.
The Bank of Canada's business outlook and senior loan officer surveys were not expected to significantly change expectations that the bank will raise its key interest rate on July 20.
Yields on overnight index swaps, which trade based on expectations for the Bank of Canada's key policy rate, showed the market sees an 82 percent chance of a July rate hike.BOCWATCH [CA/POLL]
Canadian bond prices advanced as investors shied away from assets perceived to be risky.
The two-year CA2YT=RR rose 8 Canadian cents to yield 1.671 percent, while the 10-year bond CA10YT=RR climbed 32 Canadian cents to yield 3.193 percent. (Reporting by Jennifer Kwan; editing by Peter Galloway)