CANADA FX DEBT-Canadian dollar notches 1-week high as jobs rise

    * Canadian dollar at C$1.2851, or 77.81 U.S. cents
    * Loonie touches its strongest since March 1 at C$1.2820    
    * Bond prices lower across the yield curve
    * 10-year yield touches its highest since Feb. 28

    By Fergal Smith
    TORONTO, March 9 (Reuters) - The Canadian dollar
strengthened to a more than one-week high against its U.S.
counterpart on Friday, adding to gains after Canada was exempted
the day before from U.S. metals tariffs, as domestic data showed
that employment rose in March.
    The Canadian economy added 15,400 jobs in February after a
big loss in January, but full-time positions shrank and wage
growth decelerated, prompting analysts to predict the Bank of
Canada will be in no rush to raise interest rates.              
    "There is some relief that the marked decline (in jobs) we
saw in January is not being maintained," said Paul Ferley,
assistant chief economist at Royal Bank of Canada. "It will keep
the Bank of Canada cautious."
    Chances of a rate hike by the central bank at the next
meeting in April were little changed at one-in-three, while
money markets continued to see two hikes by year end, data from
the overnight index swaps market showed.           
    The Bank of Canada, which has hiked three times since July,
left its benchmark rate unchanged at 1.25 percent on Wednesday
as it worried about an uncertain trade outlook.
    On Thursday, Bank of Canada Deputy Governor Tim Lane said it
was too soon to call the "all clear" on tariffs.             
    U.S. President Donald Trump has said that Canada and Mexico
would be exempt as long as talks to update the North American
Free Trade Agreement (NAFTA) progressed.
    At 9:38 a.m. EST (1438 GMT), the Canadian dollar         
was trading 0.3 percent higher at C$1.2851 to the greenback, or
77.81 U.S. cents. The currency touched its strongest since March
1 at C$1.2820.    
    In separate domestic data, capacity utilization rose to 86.0
percent in the fourth quarter, above predictions for a rate of
85.2 percent and the highest since the second quarter of 2007.
    U.S. job growth surged in February, recording its biggest
increase in more than 1-1/2 years, but a slowdown in wage gains
pointed to a gradual increase in inflation this year.             
    The price of oil, one of Canada's major exports, rose amid
optimism over a planned meeting between North Korean leader Kim
Jong Un and U.S. President Donald Trump.             
    U.S. crude        prices were up 1.40 percent at $60.96 a
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The 10-year            
fell 16 Canadian cents to yield 2.248 percent. The yield touched
its highest intraday since Feb. 28 at 2.258 percent.

 (Additional reporting by Nichola Saminather; editing by
Jonathan Oatis)