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* C$ hits 6-wk high at $1.0140 vs US$, or 98.62 U.S cents * Canadian bond prices rise across the curve By Claire Sibonney TORONTO, July 3 (Reuters) - The Canadian dollar climbed to its strongest level in more than six weeks against the U.S. dollar on Tuesday, buoyed by enthusiasm from a global stock market rally as expectations rose that major central banks will take more action to support the world economy. The worsening deceleration in global manufacturing activity around the world has contributed to the view that central banks, including the U.S. Federal Reserve, will have to respond. This view gained momentum on Monday when the U.S. Institute for Supply Management's data for June showed the giant U.S. manufacturing sector contracted for the first time in nearly three years. "After the ISM yesterday, we would have thought maybe more of a risk-off mood, but people are expecting more in the way of QE3 now potentially as soon as August and that's one of the factors we think that is preventing more of an erosion of risk appetite," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets. "It's still very much a risk-on, risk-off trade. It doesn't appear that domestic indicators are much of a factor at all." At 8:07 a.m. (1207 GMT), the Canadian currency was at C$1.0161 versus the U.S. dollar, or 98.42 U.S. cents, stronger than Friday's North American session close of C$1.0181 to the greenback, or 98.22 U.S. cents. Most domestic markets were closed on Monday for the Canada Day long weekend. Earlier the Canadian dollar hit an intraday high of C$1.0140, or 98.62 U.S. cents, its firmest level since May 18. Chandler expected the day's range to hold between C$1.0120 to C$1.0180. Canadian bond prices rose across the curve, despite the pick-up in riskier assets. Canada's two-year government bond was up 5 Canadian cents to yield 1.006 percent, while the benchmark 10-year bond gained 32 Canadian cents to yield 1.703 percent.