CANADA FX DEBT-C$ rallies on jobs strength before paring gains

 (New throughout, updates prices and market activity, adds
analyst comment and details of Dudley's comments)
    * Canadian dollar ends at C$1.3410, or 74.57 U.S. cents
    * Loonie touches its strongest since Monday at C$1.3343
    * Canadian dollar ends week 0.8 percent lower
    * Bond prices end lower across the yield curve
    * 10-year yield hits four-month low intraday at 1.505

    By Fergal Smith
    TORONTO, April 7 (Reuters) - The Canadian dollar
strengthened on Friday against its U.S. counterpart, boosted by
stronger-than-expected domestic jobs data, but gains for the
loonie were pared as the greenback climbed against a basket of
major currencies. 
    Canada added 19,400 jobs in March, much more than the 5,000
new positions that economists had expected. It marked the fourth
month in a row that Canada has added jobs, the latest sign the
economy is improving.             
    Still, economists doubt that the Bank of Canada will drop
its cautious tone next week when it releases its interest rate
announcement and Monetary Policy Report.
    "Policy is likely to remain unchanged, probably supported by
ongoing concern about those external risks," said Paul Ferley,
assistant chief economist at Royal Bank of Canada.
    Canada sends 75 percent of its exports to the United States
and could suffer badly if the North American Free Trade
Agreement is renegotiated or a proposed border adjustment tax is
    The U.S. dollar        rallied after New York Federal
Reserve President William Dudley reduced expectations for a
protracted pause in Fed interest rate hikes should the central
bank begin shrinking its $4.5 trillion bond portfolio.
    "The U.S. dollar has come back, pretty well supported
generally on these comments from Dudley ... also I think, on
closer examination, the U.S. jobs report was quite solid," said
Daniel Katzive, head of FX strategy North America at BNP
    U.S. job growth slowed sharply in March. But a drop in the
unemployment rate to a near 10-year low of 4.5 percent suggested
the labor market was still tightening.             
    The Canadian dollar          ended at C$1.3410 to the
greenback, or 74.57 U.S. cents, slightly stronger than
Thursday's close of C$1.3418, or 74.53 U.S. cents.
    The currency's weakest level of the session was C$1.3431,
while it touched its strongest since Monday at C$1.3343.
    Gains for the loonie came as prices of oil, one of Canada's
major exports, rose after the United States fired missiles at a
Syrian government air base.      
    U.S. crude        prices settled up 54 cents at $52.24 a
    Still, the loonie lost 0.8 percent for the week, pressured
by domestic data showing an unexpected trade deficit.
    Canadian government bond prices were lower across the yield
curve after Dudley's remarks offset safe-haven demand for
government bonds.             
    The 10-year             declined 39 Canadian cents to yield
1.596 percent. Earlier in the session, it touched its lowest
since Nov. 17 at 1.505 percent.

 (Editing by Bernadette Baum and David Gregorio)