CANADA FX DEBT-Canadian dollar in recovery mode ahead of CPI
* C$ up at C$0.9747 vs US$, or $1.0260 * Bond prices little changed across the curve By Claire Sibonney TORONTO, Sept 21 (Reuters) - Canada's dollar firmed slightly against its U.S. counterpart on Friday ahead of domestic inflation data for August, as investors moved back into riskier assets still feeling the benefits of stimulus measures from global central banks. U.S. stock futures were in positive territory, while European shares and the euro also clawed back up. Meanwhile, oil rebounded from a 1-1/2 month low, lending further support to Canada's commodity-linked currency. "It just seemed to be a general short-term recovery in risk into the end of the day and early part of the overnight and London session," said Matt Perrier, a director of foreign exchange sales at BMO Capital Markets. "Dollar/Canada is kind of settling comfortably to where it's been on average for most of the week here heading into the inflation numbers and we should take a minor queue from it." Canada's annual inflation report, due at 8:30 a.m. (1230 GMT), likely remained benign in August despite a run-up in gasoline prices in the month, leaving the central bank free to focus on fostering growth rather than fending off price pressures through rate hikes. The median forecast in a Reuters poll is for the consumer price index to climb 0.3 percent in the month for an annual rate of 1.3 percent, unchanged from July. At 8 a.m., Canada's dollar stood at C$0.9747 versus the U.S. dollar, or $1.0260, stronger than Thursday's North American session close at C$0.9765 to the U.S. dollar, or $1.0241. Perrier noted key levels to watch on Friday around C$0.9725 and C$0.9795. Helping the upbeat mood were signs that Spain is slowly moving towards requesting financial assistance. The government is considering freezing pensions and speeding up a planned rise in the retirement age to meet conditions for aid, sources with knowledge of the matter told Reuters. Markets seemed to brush a well-flagged report from Britain showing its plans to bring down its deficit have fallen behind target as the European debt crisis has hit global growth. It followed Italy's warning late on Wednesday that its recession will be far more severe than forecast, making it harder to reduce the country's debt burden. Canadian government bond prices were little changed across the curve. The two-year bond was flat, yielding 1.142 percent, while the benchmark 10-year bond was off 4 Canadian cents, yielding 1.862 percent.