CANADA FX DEBT-C$ notches 5-week high on domestic jobs gain

    * Canadian dollar at C$1.2737, or 78.51 U.S. cents
    * Loonie posts strongest since Feb. 27 at C$1.2732
    * Canada adds 32,300 jobs in March
    * Bond prices mixed across flatter yield curve

    By Fergal Smith
    TORONTO, April 6 (Reuters) - The Canadian dollar rose to a
five-week high against its U.S. counterpart on Friday as data
showing a stronger-than-expected increase in domestic jobs
offset a renewed trade spat between the United States and China.
    Canada created 32,300 jobs in March, Statistics Canada said,
topping economists' forecasts for an increase of 20,000.
Full-time jobs rose by 68,300, more than recovering from
February's decline.             
    "We did see an initial jump in the Canadian dollar, partly
because of a bit of disappointment in the U.S. (jobs) report
initially and a nice headline on the Canadian number," said Doug
Porter, chief economist at BMO Capital Markets. "I don't think
it meaningfully changed the outlook for the Bank of Canada."
    The central bank has raised interest rates three times since
July. But money markets continued to see chances of another hike
by May at less than 50 percent after the data.               
    China warned it would fight back "at any cost" with fresh
trade measures if the United States continues on its path of
protectionism, hours after President Donald Trump threatened to
slap tariffs on an additional $100 billion in Chinese goods.
    Stocks fell on fears that the tit-for-tat tariffs could
spiral into a trade war. Canada's commodity-linked economy could
be hurt if global trade slows.
    At 9:52 a.m. EDT (1352 GMT), the Canadian dollar         
was trading 0.1 percent higher at C$1.2737 to the greenback, or
78.51 U.S. cents. The currency touched its strongest since Feb.
27 at C$1.2732.
    The loonie is set to advance over the coming year, helped by
improved prospects for a revamped NAFTA trade deal, a Reuters
poll of currency strategists showed.             
    The U.S. dollar        fell on Friday after a report showed
the U.S. economy in March created the fewest jobs in six months,
although losses were limited by a pickup in wage gains.
    The price of oil, one of Canada's major exports, slipped on
trade tensions. U.S. crude        prices were down 0.4 percent
to $63.30 a barrel.             
    Canadian government bond prices were mixed across a flatter
yield curve, with the two-year            down 1 Canadian cent
to yield 1.816 percent and the 10-year             rising 2
Canadian cents to yield 2.179 percent.
    The gap between Canada's 2-year yield and its U.S.
equivalent narrowed by 2.8 basis points to a spread of -47 basis

 (Reporting by Fergal Smith
Editing by Susan Thomas)