* C$ ticks lower to 93.42 U.S. cents
* Bond prices push higher on disappointing data
* Canada October job losses reverse positive trend
By Ka Yan Ng
TORONTO, Nov 6 (Reuters) - The Canadian dollar fell on Friday, at one point losing more than half a U.S. cent, after domestic jobs data showed an unexpected drop in employment, raising the jobless rate higher than analysts had forecast.
Canada's economy unexpectedly lost 43,200 jobs in October, disappointing markets which had forecast a modest employment gain and pushing the jobless rate up to 8.6 percent from 8.4 percent in September. [ID:nN06253705]
The rise in the unemployment rate was higher than forecasts for 8.5 percent and added to expectations the Bank of Canada will keep interest rates low for a long time. The central bank has conditionally pledged to keep rates at a record low until at least the middle of next year.
The Canadian dollar slipped as low as C$1.0742 to the U.S. dollar, or 93.09 U.S. cents, but cut losses as market players prepared for the U.S. non-farm payrolls figures.
"The currency initially sold off but the declines have been somewhat muted. Part of that may be just concern about payrolls ahead for the U.S.," said Mark Chandler, fixed-income strategist at RBC Capital Markets.
The U.S. jobs data will be closely watched to gauge the strength of the U.S. economic recovery, which is critical to Canada's fortunes as well because of the pair's massive trading ties.
Analysts polled by Reuters forecast U.S. employers cut 175,000 jobs in October, fewer than the 263,000 jobs lost in September. The unemployment rate is seen rising to a fresh 26-year high of 9.9 percent. [ID:nN03495528]
At 7:45 a.m. (1245 GMT), the Canadian dollar was at C$1.0704 to the U.S. dollar, or 93.42 U.S. cents, down from C$1.0658 to the U.S. dollar, or 93.83 U.S. cents, at Thursday's close.
It was at C$1.0680, or 93.63 U.S. cents just before the report.
Canadian bond prices ticked higher as the disappointing jobs data bolstered a flight to safety ahead of the U.S. jobs data.
The two-year bond CA2YT=RR edged up 4 Canadian cents to C$99.69 to yield 1.406 percent, while the 10-year bond CA10YT=RR gained 20 Canadian cents to C$101.95 to yield 3.507 percent. (Editing by Jeffrey Hodgson)