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
    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)