* C$ hits high of C$1.0259 vs US$, or 97.48 U.S. cents,
* Global equities climb
* Bond prices slip across the curve
By Jennifer Kwan
TORONTO, Nov 29 (Reuters) - The Canadian dollar rose against the U.S. currency on Tuesday as the euro and global equities moved higher after an Italian bond auction soothed investor fears about limited demand for European debt.
Investors were somewhat relieved by Italy's success in selling 7.5 billion euros in bonds even if its cost of borrowing continues to soar. [MKTS/GLOB]
Still, Italy's borrowing costs hit a record peak of nearly 8 percent in a sign that pressure was mounting for euro zone finance ministers to resolve the two-year old debt crisis. [ID:nL4E7MT03T]
"Markets were relieved that the Italian debt auctions were cleared insomuch as they got reasonable cover ratios. Yes the auctions came at a price, but the fact the auctions were covered provided a lift to risk sentiment," said Jeremy Stretch, head of foreign exchange strategy at CIBC World Markets in London.
"You can say that the yield levels are ruinous, they're unsustainable. Yes, absolutely. But I think the market was in the short term more worried the auction was going to be covered."
The auction helped drive the Canadian dollar CAD=D4 to a high of C$1.0259 against the greenback, or 97.48 U.S. cents, but by 8:38 a.m. (1338 GMT), it retreated to C$1.0312 to the U.S. dollar, or 96.97 U.S. cents.
On Monday, it finished at C$1.0354 to the U.S. dollar, or 96.58 U.S. cents.
The currency's move higher on Tuesday follows its sharp ascent the day before as investor optimism was lifted by renewed risk appetite following a holiday-thinned week of trading.
After clawing back from the C$1.05 levels breached on Friday, Stretch said the next significant resistance levels for the Canadian dollar are seen at C$1.0240-45 to C$1.0375-80 against the U.S. currency.
Canadian government bond prices retreated across the curve, following the broader trend in the United States where Treasuries fell in part on relief Italy was able to sell debt in volumes closer to the upper end of its target. [US/]
The two-year bond CA2YT=RR fell 4 Canadian cents to yield 0.996 percent, while the 10-year bond CA10YT=RR sank 15 Canadian cents to yield 2.139 percent. (Editing by Theodore d'Afflisio)