* 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 September. "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 $1.0036. 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 crisis. 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.