* C$ closes at 93.91 U.S. cents, shy of day's high
* Touches highest level since early August
* Bonds mostly lower as stocks shoot higher
By Ka Yan Ng
TORONTO, Sept 16 (Reuters) - The Canadian dollar flew to a six-week high against the U.S. currency on Wednesday as global risk appetite grew and commodity prices firmed.
The greenback hit a one-year low against a basket of currencies as optimism about a global economic recovery eroded demand for the greenback as a safe haven.
Events and data this week have helped to boost investor optimism about the pace of economic recovery, lighting a fire under world stocks and weakening the U.S. dollar.
"Risk is the mantra for the market today, with global equities higher, commodities stronger," said John Curran, senior vice-president at CanadianForex, a commercial foreign exchange firm.
The unit raced as high as C$1.0643 to the U.S. dollar, or 93.96 U.S. cents, its highest level since Aug. 4.
It closed just shy of the high at C$1.0649 to the U.S. dollar, or 93.91 U.S. cents, up from Tuesday's close at C$1.0714 to the U.S. dollar, or 93.34 U.S. cents.
Curran noted the Canadian dollar has been unable to break out of a C$1.0630-C$1.1125 range that it has largely been held in since mid-July.
The Canadian dollar drew support after a report that domestic manufacturing sales rose in July at their fastest pace in 12 years. [ID:nN16446129]. It also got a boost from stronger commodity prices and healthy equity markets.
Toronto stocks closed higher for a fifth straight session
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issues, as the price of oil
The Canadian currency often takes its cue from moves by stock markets and commodity prices, especially oil which is a key Canadian export, with each seen as a barometer of risk appetite.
Wednesday's rise extended gains from the previous session, which came on robust U.S. retail sales and manufacturing data, and upbeat comments by U.S. Federal Reserve Chairman Ben Bernanke.
Bernanke said the recession had likely ended but said the recovery would be moderate at best. The comments also helped to support the desire by investors to take on more risk.
"The simple fact that Bernanke said the recession is likely over is very much a statement that favors the risk-loving trade and as a result the safe-haven bid for the U.S. dollar has been declining," said Eric Lascelles, chief economics and rates strategist at TD Securities.
BONDS FALL AS STOCKS PUSH HIGHER
Canadian bond prices slipped across most of the curve on Wednesday, following gains on stock markets. Bonds and stocks typically trade inversely to one another.
The two-year bond
Canadian bonds outperformed their U.S. counterparts across the curve. The Canadian 10-year bond yield moved to 9.2 basis points below its U.S. counterpart, compared with 8.3 basis points on Tuesday. (Additional reporting by Jennifer Kwan; editing by Rob Wilson)