CANADA FX DEBT-C$ stung by unexpectedly weak jobs data

* C$ ends week down 0.6 percent

* Canada sheds 43,200 jobs in October

* Bond prices little changed, long end underperforms
(Recasts)

By Frank Pingue

TORONTO, Nov 6 (Reuters) - Canada's currency skidded to its
lowest closing level in nearly a week on Friday, stung by U.S.
and Canadian jobs data that fell short of estimates and left
investors with a reduced appetite for riskier assets.

After reclaiming all of the post-jobs-data losses suffered
during early stages of Friday's session, the Canadian currency
ran into a fresh wave of selling heading into the close of the
North American session.

"We've seen a pretty steady flow of Canadian dollar sellers
today against the U.S. dollar and on some of the crosses," said
Steve Butler, director of foreign exchange trading at Scotia
Capital.

"The market has got to really come to grips with the fact
that interest rates are going to be on hold for a long time."

The data was seen making it easier for the Bank of Canada
to stick to its conditional pledge to hold its benchmark
interest rate at a record low 0.25 percent until at least the
end of June 2010.

The Canadian dollar was unloaded early in the session after
data showed Canada lost 43,200 jobs in October, which was more
than even the gloomiest analyst had predicted. [ID:N06253705]

It faced another bout of pressure when another piece of
data released shortly after showed the U.S. unemployment rate
unexpectedly rose to 10.2 percent in October. [ID:nN06178752]

U.S. data affects the Canadian currency as it offers
insight into the strength of the U.S. economic recovery, which
is critical to Canada because of the tight economic ties
between the two countries.

The Canadian dollar managed to briefly turn positive after
the reports before sliding back to a session low of C$1.0781 to
the U.S. dollar, or 92.76 U.S. cents.

The Canadian dollar closed at C$1.0753 to the U.S. dollar,
or 93.00 U.S. cents, down from C$1.0658 to the U.S. dollar, or
93.83 U.S. cents, at Thursday's close.

For the week the Canadian dollar fell 0.6 percent.

The Canadian figures added to a growing line of reports
that suggest the economy is taking two steps forward and one
step back as it emerges from recession.

"We need to have some really positive momentum before the
market's going to start talking about that parity number that
people were searching for not that long ago," said Butler.

Still, the currency's pullback was cushioned by record high
price for gold, a key Canadian export, a stable financial
sector and a rise in North American equities on Friday.

"It's an environment in many ways which does not look good
for the Canadian dollar," said David Watt, senior currency
strategist at RBC Capital Markets.

"But at the same time the factors that have been
underpinning the Canadian economy for the past several years
look a lot better than they do for a number of other nations."

BOND PRICES FLAT

Canadian bond prices straddled the break-even level across
the curve for much of the session as dealers decided against
putting too much stock in the employment data, widely
considered to be a lagging indicator.

"We are still at the turning point of the economy, which
means you are going to get a lot mixed messages from the data,"
said Michael Gregory, senior economist at BMO Capital Markets.

"There is a general sense that you really can't put too
much weight on one piece of information at this stage and
that's probably, maybe, muting a little bit of the reaction to
the jobs numbers today."

The two-year bond CA2YT=RR rose 3 Canadian cents to
C$99.68 to yield 1.408 percent, while the 10-year bond
CA10YT=RR ended up 5 Canadian cents at C$101.80 to yield
3.526 percent.

Canadian government bonds underperformed U.S. issues at the
long end of the curve, with the 10-year yield 2.4 basis points
above its U.S. counterpart, compared with less than one basis
point above on Thursday.
(Editing by Jeffrey Hodgson)