* C$ closes at 99.12 U.S. cents
* Hits near 1-week high of 99.30 U.S. cents
* Bond prices lower across curve (Updates to close, adds details, quotes)
By Claire Sibonney
TORONTO, Dec 23 (Reuters) - The Canadian dollar climbed against the greenback for a second day on Thursday in thin trade, boosted by bullish market sentiment and oil's surge to its highest price since the 2008 financial crisis.
Crude oil hit more than a two-year high above $91 a barrel propelled by more evidence the U.S. economy is strengthening, including a jump in monthly durable goods orders and consumer spending. [O/R] [ID:nN23199992]
While North American equities were relatively flat, they were hovering near peaks not seen since the collapse of Lehman Brothers. [.N] [.TO]
Canadian data also gave some mild support to the currency as the economy grew 0.2 percent in October after a brief downturn in September, but the figure was below analysts' expectations and some of the details were disappointing. [ID:nN23134993]
"We're starting to get some indications that the Canadian economy did hit a bit of a soft patch going into Q4, so that's really not much of a reason for the Canadian dollar to rally, but again it's not enough of a reason for people to get all that fretful about the Canadian dollar either," said David Watt, senior fixed income and currency strategist at RBC Capital Markets.
"The simplest explanations are sentiment is overall rather positive on markets right now and oil prices are going up."
The Canadian currency CAD=D4 closed the North American session at C$1.0089 to the U.S. dollar, or 99.12 U.S. cents, up from Wednesday's finish of C$1.0142 to the U.S. dollar, or 98.60 U.S. cents.
Earlier, it touched as high as C$1.0070 to the greenback, or 99.30 U.S. cents, its strongest level in nearly a week.
Market players noted that given little liquidity before Christmas and New Year holidays, the currency was being driven more by flows from orders going through.
"Markets are definitely choppy to lead us out of the month," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets. "We believe that the markets will still be very sharp and jagged into the close of next week, as more investors rather than corporates close out their positions at year-end."
RBC's Watt described the day's market action as "lumpy."
"At points in time you get orders that go into the market and since the market is relatively thin that tends to have a bigger footprint ... when in normal times it would probably go through without anybody noticing."
Canadian bond prices were mildly lower given the fairly positive economic data, tracking U.S. Treasuries as dealers prepared for new inventory next week. [US/]
The two-year bond CA2YT=RR was down 13 Canadian cents to yield 1.696 percent, while the 10-year bond CA10YT=RR slipped 21 Canadian cents to yield 3.184 percent.
In an interview published on Thursday, Finance Minister Jim Flaherty told Reuters he took note of "great demand" for two Canadian foreign-currency denominated bonds. [ID:nN23134240] (Reporting by Claire Sibonney; editing by Peter Galloway)