* C$ closes at C$1.0518 vs US$, or 95.08 U.S. cents * FOMC minutes more dovish than expected * Bond yields rise across curve By Solarina Ho TORONTO, July 10 The Canadian dollar ended firmer against the U.S. dollar on Wednesday after Federal Reserve minutes showed the central bank was more dovish than expected. The currency strengthened further after markets closed as Fed Chairman Ben Bernanke spoke, trading as firm as C$1.0474 versus the U.S. dollar, or 95.47 U.S. cents. Bernanke said that a "highly accommodative policy is needed for the foreseeable future," saying that the country's unemployment rate may be overstating the health of the labor market. The currency briefly hit its firmest level in about two weeks against a tumbling greenback after the release of minutes of the Federal Reserve's June policy meeting showed many officials wanted more reassurance that the recovery in the labor market would hold before pulling back on stimulus. "It was probably as discombobulated as any other currency right after the minutes came out," said David Bradley, director of foreign exchange trading at Scotiabank. "It seemed like it was very much driven by positioning - covering stale positions," he added, calling the Canadian dollar's brief move below C$1.0450 to C$1.0446, or 95.73 U.S. cents, a surprise. The Canadian dollar finished the North American session at C$1.0518 versus its U.S. counterpart, or 95.08 U.S. cents, slightly stronger than Tuesday's close at C$1.0526, or 95 U.S. cents. Financial markets were largely expecting the Fed to start cutting back the pace of its $85 billion monthly bond purchases in September, but the minutes released on Wednesday suggest that is not a guarantee. In Canada, the Bank of Canada is expected to keep its tightening bias in the first interest rate decision under new Governor Stephen Poloz, but slow growth and low inflation means a rate hike is not seen until the fourth quarter of 2014, a Reuters poll showed. Prices for Canadian government debt were mixed as Bernanke's comments were digested. The two-year bond was flat with a yield of 1.147 percent. The benchmark 10-year bond reversed course to rise 2 Canadian cents, yielding 2.475 percent.