CANADA FX DEBT-C$ weakens on falling oil prices as jobs data eyed
* Canadian dollar at C$1.2120 or 82.51 U.S. cents * Bond prices mostly higher across the maturity curve (Updates to close) By Andrea Hopkins TORONTO, May 7 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as oil prices fell back from their recent rally and investors looked ahead to Friday for employment data for the United States and Canada. Oil prices tumbled 3 percent as a resurgent U.S. dollar erased gains from the past two sessions, setting the market up for its first weekly decline in five. The greenback rose broadly after data showed lower-than-expected U.S. weekly unemployment claims, boosting expectations Friday's jobs report for April would show strength. "A lot of (the Canadian dollar weakness) was in anticipation of perhaps softer employment data coming out tomorrow and on the back of weakening commodity prices," said David Bradley, director of foreign exchange trading at Scotiabank. "Oil has had a decent rally over the last week or so and today we're down over two dollars," he noted. The Canadian dollar finished at C$1.2120 to the greenback, or 82.51 U.S. cents, weaker than the Bank of Canada's official close of C$1.2040, or 83.06 U.S. cents, on Wednesday. Friday's jobs numbers for April will be among the first major set of second-quarter data for both countries, following a tough first quarter. Analysts polled by Reuters forecast a drop of 5,000 Canadian jobs in April after a surprise 28,700 gain in employment in March. Central banks on both sides of the border have expressed optimism that their economies will strengthen this quarter. Investors will assess how the data may affect the U.S. Federal Reserve's decision on when it will begin raising interest rates as well as the Bank of Canada's decision on whether to keep rates steady or make another cut. U.S. data showed jobless claims rose 3,000 to a seasonally adjusted 265,000, well below expectations of 280,000 and holding near 15-year lows. Canadian government bond prices were mostly higher across the maturity curve, with the two-year price up 4 Canadian cents to yield 0.682 percent and the benchmark 10-year rising 65 Canadian cents to yield 1.752 percent. (Reporting by Andrea Hopkins; Editing by Steve Orlofsky)
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