* C$ retreats from three-week high to 96.61 U.S. cents
* Bond prices flat to lower
* Canada adds 35,800 jobs in August (Updates to close)
TORONTO, Sept 10 (Reuters) - The Canadian dollar dipped against the U.S. dollar on Friday, while bonds were flat to lower after Canada's August jobs report and comments by Bank of Canada Governor Mark Carney failed to solve the puzzle of monetary-policy direction.
The headline figure for the jobs data came in stronger than expected and the currency immediately rallied. But the move was short-lived as the details of the data were considered soft, suggesting the recovery's momentum had slowed. A speech and subsequent comments by Carney later in the session did not shed new light on the path of monetary policy.
From a high of C$1.0287 to the U.S. dollar, or 97.21 U.S. cents, touched immediately after the publication of the jobs report, the currency slipped as low as C$1.0375 to the U.S. dollar, or 96.39 U.S. cents.
It finished at C$1.0351 to the U.S. dollar, or 96.61 U.S. cents, down from Thursday's finish of C$1.0337, or 96.74 U.S. cents.
The two-year Canada bondwas up 1 Canadian cent to yield 1.462 percent, while the 10-year bond slipped 9 Canadian cents to yield 3.102 percent.
"I think the jobs data was viewed as fairly mixed and Carney's speech really didn't give us a lot of meat to delve into in terms of near term, so I think you can combine those things and it all creates a Canada day that is leaving us very close to where we closed yesterday," said Camilla Sutton, chief currency strategist at Scotia Capital.
Canada's economy added 35,800 jobs in August, slightly more than the consensus forecast. The headline number left an initial impression that the labor market was picking up a little steam. [ID:nN10243874]
But the details told a different tale. Excluding the volatile education component, monthly employment actually lost some 32,000 jobs, while private-sector jobs declined for a second month in a row.
"The majority of industries actually saw declines of employment in the month. The initial reaction has been to bid the Canadian dollar stronger, but I think after the details are digested, it might be seen as a bit of a disappointment," said Doug Porter, deputy chief economist at BMO Capital Markets.
Analysts said the numbers did little to sway expectations regarding the Bank of Canada's next interest rate decision in October.
The central bank nudged its overnight rate target up by 25 basis points to 1 percent on Wednesday and, contrary to most economists' expectations, did not signal a subsequent pause in rate hikes. Most primary dealers polled by Reuters, however, see a pause for the remainder of the year. [ID:nN08241537] [ID:nN08120346]
Market pricing, as measured by a Reuters calculation of yield on overnight index swaps, indicated about a 64 percent likelihood of no change in interest rates at the Bank of Canada's policy-decision date next month.
Carney, in Alberta at a conference with other top policymakers, warned the global recovery was at risk. In a speech highly critical of global leaders' track record in coordinating policies, Carney blasted proposals to replace the U.S. dollar as the world's reserve currency. [ID:nN10251216] [ID:nN10263183] (Reporting by Ka Yan Ng, Claire Sibonney and Euan Rocha; editing by Peter Galloway)
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