* Canadian dollar at C$1.0980 or 91.07 U.S. cents
* Bond prices higher across the maturity curve (Adds analyst's comment, updates prices)
TORONTO, May 2 (Reuters) - The Canadian dollar weakened on Friday after strong U.S. jobs data boosted the greenback, although the notion of a U.S. economic recovery without interest rate hikes helped the domestic currency win back some ground.
"What was really impressive was the way the loonie stormed back after falling" in the immediate aftermath of the U.S. jobs data, said Adam Button, a currency analyst at ForexLive in Montreal. "It's been a good news week for the Canadian dollar."
The loonie, as Canada's currency is colloquially known, gained 0.5 percent on the week.
The U.S. employment report showed strong job growth plus low wage inflation, which Button said might point to a stronger U.S. economy without a heightened risk of rate hikes.
"That's a best case scenario for Canada," he said.
Canada sends most of its exports south of the border, and so an uptick in U.S. demand should aid the Canadian economy. The slow pace of growth in exports has come under closer scrutiny from the Bank of Canada recently.
Canada does not release its monthly jobs report until next week.
The loonie hit a session low of C$1.1007 shortly after the U.S. jobs data was released, but the currency pared declines as investors parsed some of the less cheery details of the report, particularly a decline in the labor force participation rate.
"While the market did get a little bit excited on that upside surprise, it feels like the market is a little skeptical in terms of the actual degree of the robustness of that number," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.
Investors will want to see a few more months of data to determine if the strong growth in U.S. jobs is organic or just a bounce-back from the weather-related weakness earlier in the year, Issa said.
"That's why we're starting to see the Canadian dollar strengthen again after that initial weakness," he said.
The Canadian dollar ended the session at C$1.0980 to the greenback, or 91.07 U.S. cents, weaker than Thursday's close of C$1.0961, or 91.23 U.S. cents. It had closed last week at C$1.1036.
Investors were also watching geopolitical developments after pro-Russian rebels shot down two Ukrainian helicopters. Ongoing tensions in Ukraine have prompted risk appetite in markets to ebb and flow in recent months.
"It seems to me that the situation continues to intensify, so there is some hesitancy with some market participants, but there's no real clear indications yet where that situation is going," Issa said.
Canadian government bond prices were higher across the maturity curve, with the two-year up 0.4 of a Canadian cent to yield 1.066 percent and the benchmark 10-year up 22 Canadian cents to yield 2.349 percent. (Additional reporting by Leah Schnurr; Editing by Peter Galloway)