CANADA FX DEBT-C$ slips after economy unexpectedly sheds jobs

    * Canadian dollar at C$1.3163, or 75.97 U.S. cents
    * Canada loses 51,600 jobs in August
    * Bond prices lower across the yield curve

    TORONTO, Sept 7 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, pressured by domestic
data showing that the economy unexpectedly shed jobs in August.
    Canada's economy lost 51,600 jobs in August after two months
of gains, with losses in part-time work overtaking gains in
full-time employment, Statistics Canada said. Analysts surveyed
by Reuters had expected the economy to add 5,000 jobs.
    Chances of a Bank of Canada interest rate hike in October
were little changed following the release of the data, at about
60 percent, the overnight index swaps market indicated.
    At 8:55 a.m. (1255 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.3163 to the greenback, or 75.97
U.S. cents. The currency traded in a range of C$1.3111 to
    On Thursday, the loonie got a boost after Bank of Canada
Senior Deputy Governor Carolyn Wilkins said in a speech that the
central bank had discussed dropping its gradual approach to
raising rates.             
    U.S. and Canadian negotiators pushed ahead in talks to
rescue the North American Free Trade Agreement on Thursday, but
a few stubborn issues stood in the way of a deal. These included
dairy quotas, protection for Canadian media companies, and how
to resolve future trade disputes.             
    Canada sends about 75 percent of its exports to the United
States, so its economy could be hurt if a deal is not reached.
    The price of oil, one of Canada's major exports, was little
changed as a rise in stocks of refined petroleum products offset
a big fall in U.S. crude inventories to the lowest level since
    U.S. crude        prices were up 0.01 percent at $67.78 a
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after strong U.S. jobs
data cemented expectations for the Federal Reserve increasing
interest rates further.             
    The two-year            fell 3 Canadian cents to yield 2.081
percent and the 10-year             declined 12 Canadian cents
to yield 2.246 percent.   

 (Reporting by Fergal Smith; Editing by Bernadette Baum)