* Canadian dollar touches session low of 91.23 U.S. cents
* Worse-than-expected U.S. jobs data hits currency
By Jennifer Kwan
TORONTO, Oct 2 (Reuters) - The Canadian dollar sank against the U.S. dollar on Friday morning, touching a session low after a weaker-than-expected U.S. jobs report fanned worries about the global economic recovery.
U.S. employers cut a deeper-than-expected 263,000 jobs in September, lifting the unemployment rate to 9.8 percent, according to a government report on Friday. Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September. [ID:nN01277999]
"There was a lot of shock and awe over the original headline. Obviously, much worse than expectations," said Steve Butler, director of foreign exchange trading at Scotia Capital.
The data dragged the commodity-linked Canadian unit as low as C$1.0961 to the U.S. dollar, or 91.23 U.S. cents. However, by 8:55 a.m. (1255 GMT), the Canadian unit came off its low levels and was at C$1.0925 to the U.S. dollar, or 91.53 U.S. cents. On Thursday, it closed at C$1.0845 to the U.S. dollar, or 92.21 U.S. cents.
"We initially saw a big knee-jerk reaction but I think things are coming back a little bit because there was a lot of bearishness built into these numbers," said Butler.
Other factors weighing on the Canadian unit included weak oil CLC1, a key Canadian export, and gold prices, as well as sliding global equity markets. [O/R] [GOL/]
Canadian bonds were mostly higher, following the big U.S. Treasury market, where prices rallied after the weak September payroll data. [US/] (Editing by Jeffrey Hodgson)