* C$ edges up to 96.51 U.S. cents
* Bond prices float higher
* Next up: May GDP in Canada, Q2 GDP in U.S. (Updates to close)
By Ka Yan Ng
OTTAWA, July 29 (Reuters) - The Canadian dollar finished higher against the greenback on Thursday after seesawing through the session but ultimately rising on firmer commodity markets and a broadly weaker U.S. dollar.
Sentiment was boosted by the euro, which broke above $1.3100 to a 12-week high against the U.S. dollar as upbeat European data prompted investors to bet that the European economy is on a better track than that of the United States. [FRX/]
Oil rose above $78 after falling the previous day on soft U.S. economic data and the biggest weekly increase in crude inventories in nearly two years in the United States. [O/R]
North American stock markets were mixed, with the resource-heavy main stock index in Toronto advancing but U.S. stock indexes losing steam at the end of the session. [.N] [.TO] The Canadian dollar often takes its direction from equity markets, which are seen as a gauge of investor risk appetite.
The Canadian currency CAD=D4 finished at C$1.0362 to the U.S. dollar, or 96.51 U.S. cents, after falling for the previous two days. It finished Wednesday at C$1.0385 to the U.S. dollar, or 96.29 U.S. cents.
"The Canadian dollar has really followed the flow that's been in most capital markets during the course of the day. Equities have been oscillating ... commodities, by and large, have been positive," said Jack Spitz, managing director of foreign exchange at National Bank Financial in Toronto.
At one point, the currency turned briefly negative on the day, but was otherwise range-bound as it has been for the past week.
"We're still in this range, we couldn't break through C$1.0260 and anywhere above C$1.0420 seems to be an area to sell U.S. and buy a little Canada short term," said Firas Askari, head of foreign exchange trading at BMO Capital Markets.
"But I'm having a hard time seeing how we're going to break out of this C$1.0150 to C$1.0850 range in the next few months, the same range we've been in for months."
BOND PRICES CLIMB
Canadian bond prices were higher, but off the day's highs, as declines in U.S. stock markets helped keep a bid to government debt, despite a modest advance in Canadian equity markets.
The Canadian two-year bond CA2YT=RR was up 13 Canadian cent to yield 1.530 percent, while the 10-year bond CA10YT=RR jumped 40 Canadian cents to yield 3.171 percent.
In Canadian data, producer and raw materials prices both fell unexpectedly in June from the previous month, triggered by declines in commodity prices. But market players largely looked past the figures, which were seen being unlikely to sway near-term monetary policy. [ID:nN29193842]
Looking ahead to Friday, GDP figures are due from both Canada and the United States. The Canadian gross domestic product figure is expected to show a 0.1 advance in May from April, but market watchers say U.S.second-quarter GDP data will likely be the focus of trading. ECON (Additional reporting by Claire Sibonney; editing by Peter Galloway)