UDPATE 1-Canada defends US$ as global reserve currency

* Sees stability based on greenback in global crisis

* Expects forex discussion at G8 meeting

* Sees room for more C$ appreciation

* Forecasts higher jobless rates in Canada, U.S. (Updates throughout with comment, details)

OTTAWA, July 3 (Reuters) - The U.S. dollar as the global reserve currency of choice has been a stabilizing force during the current financial crisis, Canada said on Friday, downplaying calls to debate the greenback's dominant status.

Canadian Finance Minister Jim Flaherty told reporters he did not know whether the U.S. dollar's role as the global reserve currency would be included in the final communique of a meeting between the Group of Eight leaders and a heads of emerging nations in Italy next week.

"It's an issue that we have not addressed other than to say that, in the midst of what is still a significant global recession, it's important that we aim for stability, and stability has been based on the U.S. dollar as the global currency," Flaherty said via teleconference from Chile.

China has asked for a debate on a new global reserve currency by the G8 and five emerging economies, G8 sources have told Reuters. News of the Chinese request pushed the U.S. dollar down to a three-week low on Wednesday. [ID:nL1293071]

Flaherty said he expected the G8 to have a more general discussion on foreign exchange at its summit.