CANADA FX DEBT-C$ weakens as investors eye Friday jobs data

* C$ at C$1.0506 vs US$, or 95.18 U.S. cents
    * Economists expect 20,000 jobs created in Canada in Aug.
    * Bond prices lower across maturity curve

    By Leah Schnurr
    TORONTO, Sept 5 (Reuters) - The Canadian dollar weakened
modestly against its U.S. counterpart on Thursday as a
wait-and-see stance from investors kept the currency trading in
a range a day before the release of closely watched employment
reports on both sides of the border.
    The U.S. dollar was also stronger against other currencies
and rose to a seven-week peak against the euro, helped by
Thursday's strong economic data and after the head of the
European Central Bank said its Governing Council expects ECB
interest rates to remain at the current or lower levels for an
extended period. 
    Economic data in the United States has taken on a particular
significance of late as investors try to gauge when the recovery
will be considered strong enough for the Federal Reserve to
start trimming its economic stimulus program.
    Should Friday's U.S. non farm payrolls report show a
sustained recovery in the job market, it will likely reinforce
expectations the Fed will begin trimming its bond-buying program
when it meets in mid-September. Analysts are looking for a gain
of 180,000 jobs in August.
    "Some of the key economic indicators are pointing to a more
sustained recovery and a more positive economic outlook for the
U.S.," said Gareth Sylvester, director at Klarity FX in San
    "The majority of the market is certainly on the verge of
saying: 'Yes, it's likely they will taper in September.'"
    The Canadian dollar ended the session at C$1.0506
versus the U.S. dollar, or 95.18 U.S. cents, weaker than
Wednesday's finish at C$1.0492, or 95.31 U.S. cents.
    "We see some substantial moves in other currencies compared
to the big dollar ... And yet Canada has been pretty much
anchored to current levels," said Brad Schruder, director of
foreign exchange at BMO Capital Markets. 
    "I think that's a reflection of North American payrolls
tomorrow and folks choosing to err on the side of caution." 
    Schruder noted the recent string of disappointing Canadian
data, but said there were factors that could result in a
positive surprise for Canadian employment data.
    In Canada, economists expect that 20,000 new jobs were
created in August, rebounding somewhat from a sharp drop of
39,400 in July.
    Prices for Canadian government debt were lower, with the
two-year bond off 12-1/2 Canadian cents to yield
1.304 percent and the benchmark 10-year bond down 74
Canadian cents to yield 2.811 percent.