CANADA FX DEBT-C$ hovers around 3-yr low, jobs data in view

* C$ at C$1.0682 vs US$, or 93.62 U.S. cents
    * C$ just below three-year lows
    * Bond prices lower across maturity curve

    By Leah Schnurr
    TORONTO, Dec 5 (Reuters) - The Canadian dollar weakened
against the greenback on Thursday, hovering just below a
3-1/2-year low as a more dovish-than-expected tone from the Bank
of Canada reinforced a market view that interest rates will stay
low for some time.
    Investors also positioned ahead of labor market reports due
on Friday for both Canada and the United States. The data south
of the border will be key in calibrating expectations for when
the U.S. Federal Reserve might start to wind down its economic
    "The market will be a bit wary about tomorrow's numbers,"
said Dean Popplewell, chief currency strategist at OANDA in
    "Everybody is looking for some sort of indication whether a
Fed taper will be introduced as early as this month."
    Investors are trying to gauge whether the Fed will start to
reduce its $85 billion a month in bond purchases at its next
meeting later in December, or hold off until next year.
    The Canadian dollar has fallen in six of its last sessions,
dropping through key support levels as investors turned bearish.
The loonie got some relief, firming against the U.S. currency in
early Thursday trading, but it soon gave the gains back.
    In a statement that showed the central bank is increasingly
concerned about possible disinflation, the Bank of Canada on
Wednesday said the risks of weak inflation now appear greater
than they did six weeks ago. 
    As was widely expected, the central bank also held its key
interest rate at 1 percent - where it has been since 2010.
October's policy shift has pushed out market expectations for
the next rate hike into 2015. 
    Wednesday's statement was the first following a policy shift
in October, when the central bank dropped any mention of a rate
hike, catching markets off guard.
    Since the October statement, the loonie has lost more than 3
percent. During the period, it has also been pressured by weak
oil prices and the prospect of the U.S. Fed winding down sooner
rather than later.
    The Canadian dollar was at C$1.0682 to the
greenback, or 93.62 U.S. cents, weaker than Wednesday's close of
C$1.0678, or 93.65 U.S. cents.
    The loonie eased as far as C$1.0708 during Wednesday's
session, its weakest level since May 2010. 
    The currency barely reacted to data on Thursday that showed
the value of building permits in Canada jumped 7.4 percent to
C$7.19 billion ($6.72 billion) in October in another sign of
renewed strength in the housing market. 
    Data on Friday is forecast to show Canada added 12,000 jobs
in November, while the unemployment rate is seen holding at 6.9
percent. In the United States, the economy is expected to have
created 180,000 last month. 
    The two-year bond was down 3 Canadian cents to
yield 1.080 percent, while the benchmark 10-year bond
 fell 19 Canadian cents to yield 2.675 percent.