CANADA FX DEBT-Canadian dollar rallies as jobs gain clips rate cut bets

    * Canadian dollar rises 0.1% against greenback
    * Canada adds 35,200 jobs in December
    * Price of U.S. oil declines 0.4%
    * Canadian bond prices fall across yield curve

    TORONTO, Jan 10 (Reuters) - The Canadian dollar rallied
against the greenback on Friday, clawing back some of its
decline this week, as investors cut bets that the Bank of Canada
would ease interest rates after domestic data showed a
bigger-than-expected jobs rebound in December.       
    Canada's economy added 35,200 jobs in December, exceeding
the gain of 25,000 that economists had forecast, while the
unemployment rate fell to 5.6%, official data showed.
    Data last month showed jobs declined in November by 71,200,
the most for any month since 2009, which raised doubts about the
strength of Canada's economy.             
    Chances of a rate cut by July fell to less than 30% from
nearly 40% before the release of the data on Friday, the
overnight index swaps market showed.           
    At 9:25 a.m. (1425 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3039 to the greenback, or 76.69 U.S.
cents. The currency, which on Thursday hit near a two-week low
intraday at 1.3104, traded in a range of 1.3029 to 1.3075.
    For the week, the loonie was on track to weaken 0.3%.
    The price of oil, one of Canada's major exports, added to
its decline since Wednesday, when the threat of a wider conflict
between the United States and Iran receded. U.S. crude oil
futures        were down 0.4% at $59.30 a barrel.
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 6 Canadian cents to
yield 1.668% and the 10-year             falling 22 Canadian
cents to yield 1.629%.
    Canada's 2-year yield rose 2.6 basis points further above
the yield on the equivalent U.S. government bond to a spread of
8.8 basis points, after U.S. data showed a weaker-than-expected
December jobs gain.             

 (Reporting by Fergal Smith
Editing by Paul Simao)