* C$ rallies as high as 86.44 U.S. cents
* Currency gains follow upbeat jobs data
* Bond prices lower across the curve
By Frank Pingue
TORONTO, May 8 (Reuters) - The Canadian dollar raced to its highest level in more than six months on Friday as domestic and U.S. jobs data that came in better than expected offered a bid to perceived riskier currencies.
Canada's currency rallied to C$1.1569 to the U.S. dollar, or 86.44 U.S. cents, right after the 8:30 a.m. (1230 GMT) U.S. data showed employers there cut less jobs than was expected in April [ID:nN07416806]. That was the domestic currency's highest level since Nov. 5.
The rise added to gains recorded earlier when a Canadian jobs report showed employers unexpectedly added 35,900 jobs in April, compared with analysts' expectations for more heavy job losses [ID:nN08444159]
"With the U.S. numbers being a little better than expected the interesting thing is we've actually seen the U.S. dollar weaken off because it's the risk aversion theme that's driving price action right now," said George Davis, chief technical strategist at RBC Capital Markets.
"And with equity markets firming up a little bit on the back of the stronger than expected employment report that has pushed risk aversion levels lower which in turn has been negative for the U.S. dollar."
By 9:35 a.m., the Canadian unit had backed off slightly to C$1.1596 to the U.S. dollar, or 86.24 U.S. cents, still up from Thursday's close of C$1.1725 to the U.S. dollar, or 85.29 U.S. cents.
The Canadian dollar had started its ascent ahead of the 7:00 a.m. domestic jobs report. Analysts said there was early chatter in the marketplace that the report could be stronger than expected.
BOND PRICES LOWER
Canadian bond prices were lower across the curve as the latest upbeat employment figures lessened the appeal for more secure assets like government debt and convinced many investors to favor equities.
Toronto's key stock index rallied 1.4 percent at the start, while U.S. equities also opened higher.
The benchmark two-year Canadian government bond was down 10 Canadian cents at C$100.28 to yield 1.114 percent, while the 10-year bond slipped 70 Canadian cents to C$104.60 to yield 3.969 percent.
The 30-year bond was off 95 Canadian cents at C$117.35 to yield 3.969 percent. (Editing by Jeffrey Hodgson)