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CANADA FX DEBT-Canadian dollar rallies as jobs gain clears path for BoC stimulus cut

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar strengthens 0.6% against the greenback
    * Canada adds 231,000 jobs in June
    * Price of U.S. oil settles 2.2% higher
    * Canadian bond yields rise across much of a steeper curve

    By Fergal Smith
    TORONTO, July 9 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Friday, clawing back some of
this week's decline, as domestic jobs data supported
expectations for further reduction of the Bank of Canada's asset
purchase program.
    Canada added 231,000 jobs in June, more than expected,
bringing employment within 1.8% of pre-pandemic levels, as
public health restrictions were eased in several regions of the
country, Statistics Canada data showed.             
    "It looks encouraging," said Amo Sahota, director at Klarity
FX in San Francisco. "I think it's going to confirm what's
widely anticipated next week. The Bank of Canada is going to
adjust their tapering and reduce the amount of asset purchases."
    With Canadian vaccinations progressing at a rapid pace and
provinces easing economic restrictions, the BoC is expected to
cut bond purchases by C$1 billion to C$2 billion per week next
Wednesday, a Reuters poll showed.             
    Still, the growing spread of the Delta coronavirus variant
could cap the central bank's optimism on the economic outlook,
Sahota said.
    The Canadian dollar        was trading 0.6% higher at 1.2455
to the greenback, or 80.29 U.S. cents. On Thursday, the currency
hit a 2-1/2 month low at 1.2590, while it was down 1.1% for the
week.
    The loonie's gain on Friday came as Wall Street rebounded,
recouping all its loses triggered by growth worries earlier in
the week.             
    The price of oil, one of Canada's major exports, also moved
higher, as data showing a draw in U.S. inventories offset
uncertainty over global supplies after an OPEC+ impasse. U.S.
crude        settled 2.2% higher at $74.56 a barrel.
                
    Canadian bond yields rose across much of a steeper curve,
tracking the move in U.S. Treasuries. The 10-year            
was up 6 basis points at 1.325%, after touching on Thursday its
lowest level in over four months at 1.239%. 

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and
Andrea Ricci)
  
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