CANADA FX DEBT-C$ rallies on strong jobs data

* C$ at C$0.9927 vs US$, or $1.0073
    * Canadian March jobs gain highest since 2008
    * Spanish debt concerns weigh
    * Bond prices mostly lower

    By Jon Cook	
    TORONTO, April 5 (Reuters) - The Canadian dollar rallied
against its U.S. counterpart on Thursday after data showed
Canadian hiring in March accelerated to its fastest pace in
nearly four years.	
    Canada's economy added a higher-than-expected 82,300 jobs in
March, marking the largest monthly job increase since September
2008, Statistics Canada said on Thursday. Analysts surveyed by
Reuters had forecast, on average, a gain of just 10,000 jobs in
the month. 	
   The unemployment rate also fell to 7.2 percent in March from
7.4 percent in February, hitting its lowest point since last
    "No question this is a positive for the currency," said Doug
Porter, deputy chief economist at BMO Capital Markets. "This is
the best Canadian employment report we've seen in quite some
time and I think this does change the debate on the outlook. So
it is definitely a big supportive factor for the currency."	
    The strong domestic data helped the Canadian currency
reverse earlier losses against the U.S. dollar, after falling
close to parity on fresh European debt concerns and after the
greenback was boosted this week by signals from the U.S. Federal
Reserve that it was not considering further monetary stimulus.	
   At 9:30 a.m. (1320 GMT), the Canadian dollar was at
C$0.9927 versus the U.S. currency, or $1.0073, up from
Wednesday's close at C$0.9964 versus the U.S. currency, or
    Canada's dollar was also stronger against all the other
major currencies, rising more than 1 percent against the euro
    The single currency fell broadly on Thursday with further
losses expected as a decline in Spain's bond prices highlighted
investor concern about a renewed round in the euro zone debt
    The euro slid further against the U.S. dollar after U.S.
data on Thursday showed the number of Americans lining up for
new jobless benefits fell to the lowest level in nearly four
years last week. 	
    While the headline number of 357,000 jobless claims was
slightly above estimates for 355,000, Paul Ferley, assistant
chief economist for Royal Bank of Canada, said it was
"consistent with the U.S. economy continuing to generate jobs."	
    The Canadian jobs bounce had traders increasing bets on a
rate hike by the Bank of Canada in the second half of 2012, as
reflected by overnight index swaps. 	
    "The stronger than expected data raises the prospect of the
Bank returning to tightening mode sooner than was previously
expected and with that offering support to the Canadian dollar,"
said Ferley.	
    A Reuters poll released on Wednesday showed the Canadian
dollar at exactly $1.00 in one, three and six months from now.
In a year, the currency is expected to strengthen slightly to
C$0.988 versus the U.S. dollar. 	
    Canadian government bond prices were mostly lower. Canada's
2-year bond was down 8 Canadian cents to yield 1.259
percent, while the 10-year bond fell 7 Canadian
cents to yield 2.138 percent.