* C$ higher after overnight rally
* Adds to gains after data; CPI up after 4-month decline
* Bond prices down across the curve
By Frank Pingue
TORONTO, Nov 18 (Reuters) - Canada's currency drew support from lofty commodity prices and rose against the U.S. dollar on Wednesday, but showed little reaction to inflation data that is not expected to draw concern from the Bank of Canada.
The currency was already higher ahead of the data given overnight gains attributed to record high gold prices and oil prices that moved back above $80 a barrel. [GOL/] [O/R] Both are key Canadian exports that influence the Canadian dollar.
It tacked on minor gains shortly after data showed consumer prices in Canada rose in October. But the report is not expected to sway the Bank of Canada from holding its key interest rate at a record low 0.25 percent until mid-2010. [ID:nN1892543]
The Canadian dollar rose to a session high of C$1.0450 to the U.S. dollar, or 95.69 U.S. cents, shortly after the report from its pre-data level around C$1.0469 to the U.S. dollar, or 95.52 U.S. cents.
"The lack of substantial movement in financial markets speaks to the modest nature of the upside surprise," said Eric Lascelles, chief economics and rates strategist at TD Securities. "There is nothing hugely shocking here and I don't think there is any major implication for the central bank."
By 8:11 a.m. (1311 GMT), the Canadian unit was at C$1.0468 to the U.S. dollar, or 95.53 U.S. cents, up from C$1.0511 to the U.S. dollar, or 95.14 U.S. cents, at Tuesday's close.
Also helping to prop up the Canadian dollar was investor hunger for risk as the year end approached.
Expectations that U.S. interest rates will remain exceptionally low for some time have encouraged global investors to look for better returns from riskier trades such high-yielding currencies, commodities and stocks.
Domestic bond prices were lower across the curve given the greater appetite for risk, which was expected to give the resource-heavy S&P/TSX composite index .GSPTSE a boost. (Editing by Jeffrey Hodgson)