* C$ steadies after U.S. jobs data at $1.0283
* Bonds outperform U.S. Treasuries (Adds details)
TORONTO, March 4 (Reuters) - The Canadian dollarhit a session high against the U.S. dollar on Friday, then pared gains to trade steady after data showed the U.S. economy created more jobs in February.
The currency hit a session high at C$0.9708 to the U.S. dollar, or $1.0301, following a surge in U.S. employment last month, which suggested the economic recovery has gathered speed.
By 9:15 a.m. (1415 GMT), the Canadian dollar had steadied to around the previous session's close. It was at C$0.9725 to the U.S. dollar, or $1.0283, down slightly from Thursday's North American finish of C$0.9722 to the U.S. dollar, or $1.0286.
"It spiked on the news and came right back, not surprisingly," said Benjamin Reitzes, economist at BMO Capital Markets.
"The report is basically good news, but more or less as expected. Maybe seeing a decent number for a change gave a little boost of optimism just for a second."
Nonfarm payrolls in the United States increased 192,000, above market expectations for 185,000 jobs, and data for December and January was revised higher. The unemployment rate dipped to its lowest since April 2009 to 8.9 percent from 9 percent. [ID:nOAT004757]
Reitzes said the data was in line with his expectations, although the drop in the unemployment rate was unlikely to be sustainable for the next few months.
While momentum is gathering in U.S. jobs, economists believe the U.S. Federal Reserve will want to see payroll gains in excess of 200,000 for at least six to nine months and a significant decline in unemployment before starting to withdraw its massive monetary support from the economy.
Government bond prices were mildly firmer across the curve, and outperformed U.S. Treasuries, following the U.S. jobs data.
The two-year bondwas up 3 Canadian cents to yield of 1.863 percent, while the 10-year bond added 14 Canadian cents to yield 3.379 percent. (Reporting by Solarina Ho and Ka Yan Ng, Editing by Chizu Nomiyama)
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