* HSBC China PMI rises to 50.8 in June from 49.4 in May
* Canadian dollar extends gains after inflation shock
* Euro capped after dovish comments from ECB
By Hideyuki Sano and Ian Chua
TOKYO/SYDNEY, June 23 (Reuters) - The Australian dollar jumped to test its year-to-date peak on Monday after a Chinese manufacturing survey showed surprisingly big improvements.
The Canadian dollar also hit a five-month high, building on to its 0.6 percent gain against the greenback on Friday as surprisingly high Canadian inflation data and robust retail sales figures challenged the central bank's accommodative policy stance.
The Aussie rose to as high as $0.9444, near its April 10 peak of $0.9461. A climb above that would take the currency to its highest level since November. It last stood at $0.9438, up 0.6 percent.
Sparking the Aussie's jump was a preliminary HSBC survey showed activity in China's factory sector expanded in June for the first time in six months as new orders surged.
"The flash PMI for June showed that the economy has turned the corner. Both domestic and external demand kept expanding," HSBC analysts wrote in the PMI report.
The upbeat report on China came as a relief for investors fretting about the health of Australia's biggest export market and a recent slide in iron ore prices.
Another outstanding performer was the Canadian dollar, which rose about 0.3 percent in Asia to hit a 5 1/2-month high around C$1.0725 per U.S. dollar.
The Canadian unit gained on Friday after the country's annual inflation rate hit a 27-month high of 2.3 percent in May. This was above the central bank's target and raised doubts on the Bank of Canada's accommodative policy stance.
Other major currencies moved little, with the euro undermined by dovish comments from the European Central Bank at the weekend.
ECB President Mario Draghi said interest rates would stay low over a longer period and that large-scale asset purchases were still part of the central bank's toolkit.
The common currency briefly slipped to $1.3587 before steadying around $1.3600, the same level as late New York on Friday.
As a result, the dollar index was flat at 80.282, steadying after last week's 0.3 percent fall, its biggest decline in over a month.
Against the yen, the dollar was little changed at 101.99 yen .
The British pound was firmer, trading at $1.7018, up 0.1 percent from last week, on expectations the Bank of England could raise interest rates before the end of this year. The pound held near a 5-1/2 year high of $1.7064 hit on Thursday.
One of the Bank of England's most dovish policymakers, David Miles, tried to play down those expectations. In an article published on Sunday, Miles said subdued inflation in Britain would enable policymakers to raise interest rates gradually.
Still, many speculators are pouring funds into sterling, desperately seeking a trend as the euro and the yen comfortably sit in narrow ranges.
Data from a U.S. financial watchdog showed speculators' long position in the pound futures hit the highest level since late 2007 last week.
Currency markets have yet to show any reaction to the violence in Iraq, although oil prices have risen on concerns over possible supply disruption.
On Sunday, militants overran a second frontier post on the Syrian border, extending two weeks of swift territorial gains as the Islamic State of Iraq and the Levant (ISIL) pursues the goal of its own power base, a "caliphate" straddling both countries that has raised alarm across the Middle East and in the West. (Editing by Richard Pullin and Richard Borsuk)