* Ends at C$1.0033 to the US$, or or 99.67 U.S. cents
* U.S. jobs numbers raise fears of sluggish recovery
* Bond prices flat to higher across the curve
* Most Canada dealers see first BoC rate hike in July (Updates to close, adds details, quotes)
By Jennifer Kwan
TORONTO, April 15 (Reuters) - The Canadian dollar retreated from parity with its U.S. counterpart on Thursday, finishing the session lower as oil prices dropped and investor sentiment was bruised by data pointing to a weak U.S. labor market.
U.S. manufacturers were busy in April as factories ramped up production to rebuild inventories, but a rise in initial jobless claims suggested a sluggish economic recovery. [ID:nN15325702]
"The key factor is, in some ways, the disappointing report out of the U.S. on jobless claims," said Millan Mulraine, economics strategist at TD Securities.
"The more prolonged the U.S. economic recovery becomes the less favorable it is for risk assets and risk currencies like the Canadian dollar," he said.
"Slow employment growth in the U.S. will certainly mean slower demand for goods produced by Canada, and that will certainly put some dampening impact on the excitement investors have towards the Canadian dollar."
North American equity markets were also on a somewhat wobbly footing on Thursday, while the euro fell broadly as worries about Greece's debt problems persisted. [FRX/]
The Canadian dollar CAD=D3 finished at C$1.0033 to the U.S. dollar, or 99.67 U.S. cents, down from Wednesday's close at C$0.9992 to the U.S. dollar, or $1.0008, the unit's first close above parity with the greenback since May 2008.
Earlier in the day, the currency CAD=D3 hit a high of C$0.9964 to the U.S. dollar, or $1.0036, supported by further signs of growth in China. Still, the U.S. jobless claims data and persistent concerns about Greece kept optimism contained.
Also weighing on the currency were oil prices, which fell below $86 a barrel on a stronger U.S. dollar and the mixed economic data. [O/R] [ID:nTOE63D091]
Matthew Strauss, senior currency strategist at RBC Capital Markets, said the market was awaiting more direction from the Bank of Canada next week, when it issues its interest rate announcement as well as its Monetary Policy Report.
A Reuters poll conducted on Thursday revealed most of Canada's primary securities dealers expect the central bank will raise interest rates in July as the high-flying Canadian dollar gives it some wiggle room even as the economy picks up steam. [CA/POLL]
"I think it's clear the Canadian economy is doing well," said David Ipperciel, vice-president and director of sales at Casgain & Co. "Technically, they could raise their rates more, but the currency is helping them."
The bank has said it will hold its key rate at a historic low of 0.25 percent, so long as inflation remains in check.
BONDS LITTLE CHANGED
Canadian bond prices were flat to slightly higher across the curve, but the trend mirrored the U.S. Treasury bonds, which rose on worries about the state of the U.S. labor market and doubts about a Greek aid package. [US/]
"We're having a bit of flight to safety. Treasuries have been the pick of the assets today," said Mulraine.
The two-year government bond CA2YT=RR ticked 2 Canadian cents higher to C$99.21 to yield 1.933 percent, while the 30-year bond CA30YT=RR was unchanged at C$114.45 to yield 4.111 percent.
Canadian government bonds mostly underperformed U.S. issues, with the two-year yield 90.1 basis points above its U.S. counterpart, compared with around 88 basis points the previous session. (Additional reporting by Claire Sibonney; editing by Rob Wilson)