* Canadian dollar rises 0.3 percent against the greenback * Domestic jobs rise 55,900 in February * Price of U.S. oil falls 3 percent * Canadian bond prices fall across the yield curve By Fergal Smith TORONTO, March 8 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday, as investors slashed bets on an interest rate cut this year by the Bank of Canada after domestic data showing a surprise jump in jobs in February. Employers added 55,900 jobs in February, which was the third month of outsized gains in the last four and exceeded the 20,000 jobs created in the United States for the same month. Analysts had forecast February job numbers to be flat in Canada. Chances of an interest rate cut by December, which had climbed this week on a more dovish tone from the Bank of Canada, fell to 20 percent from nearly 40 percent before the data, the overnight index swaps market indicated. "I think if you look at this big picture it is an argument for the Bank of Canada to remain on the sidelines in the near term, rather than one for them to consider eases," said Andrew Kelvin, senior rates strategist at TD Securities. The Bank of Canada has raised interest rates 125 basis points since July 2017. Its benchmark rate is at 1.75 percent. At 9:31 a.m. (1431 GMT), the Canadian dollar was trading 0.3 percent higher at 1.3419 to the greenback, or 74.52 U.S. cents. The currency, which touched on Thursday its weakest in more than two months at 1.3467, traded in a range of 1.3391 to 1.3466. Gains for the loonie came despite a drop in the price of oil, one of Canada's major exports, after the European Central Bank warned of continued weakness and fresh data showed Chinese imports and exports slumped last month. U.S. crude prices were down 3 percent at $54.94 a barrel. Separate data, from the national housing agency, showed that Canadian housing starts tumbled about 16 percent in February as groundbreaking on urban single-detached and multiple unit homes declined. Canadian government bond prices were lower across the yield curve, with the two-year down 5 Canadian cents to yield 1.651 percent and the 10-year falling 7 Canadian cents to yield 1.771 percent. Before the jobs data, the 2-year yield touched its lowest intraday since December 2017 at 1.593 percent. (Reporting by Fergal Smith Editing by Susan Thomas)
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