* C$ edges up to C$0.9921 vs US$, or $1.0080 * Bond prices ease across the curve By Claire Sibonney TORONTO, Dec 3 (Reuters) - The Canadian dollar firmed against its U.S. counterpart on Monday as signs of economic growth in China and a slower contraction in Europe lifted demand for riskier assets, but caution over the U.S. budget crisis limited gains. The currency advanced alongside stocks and commodities after the latest readings from both official and private sector surveys of China's vast manufacturing sector showed activity picked up November, adding to evidence the economy is reviving after seven quarters of slowing growth. Meanwhile, final readings of the euro zone's Manufacturing Purchasing Managers Index (PMI) for November showed factory activity declining at a slower rate, though this still leaves the region on course for its worst quarter since early 2009. Signs Greece was making progress in making its debt sustainable also boosted confidence, pushing the euro to a six-week high against the U.S. dollar. "I think it's really a move which is being led by euro/dollar and it's just spilling over into dollar direction generally," said Adam Cole, global head of FX strategy at RBC Capital Markets in London. At 8 a.m. (1300 GMT), the Canadian currency stood around C$0.9921 versus the greenback, or $1.0080, compared to Friday's North American session close at C$0.9936, or $1.0064, capping off a 0.7 percent gain for the month of November. "The (U.S.) dollar is lower against most of the majors overnight rather than being anything specific to Canada. There is plenty going on in Canada this week but not so much today really." Investors will be watching the Bank of Canada's interest rate announcement on Tuesday for any shift in its long-held tightening bias. The central bank is expected to hold off raising interest rates until the fourth quarter of 2013 but will continue to talk about a future hike when it sets policy, a Reuters poll of market forecasters found. Markets are also still cautious about the budget impasse in Washington. U.S. Treasury Secretary Timothy Geithner pushed Republicans on Sunday to offer specific ideas to cut the deficit, and predicted that they would agree to raise tax rates on the rich to obtain a year-end deal and avoid a possible recession. On Monday, U.S. manufacturing data due at 10 a.m. is expected to drive further direction. Canadian bond prices eased across the curve. The two-year bond was off 3 Canadian cents to yield 1.085 percent, while the benchmark 10-year bond lost 27 Canadian cents to yield 1.729 percent.