CANADA FX DEBT-Canadian dollar hits 2-month low after surprise jobs loss

* Canadian dollar weakens 0.2% against the greenback

* Touches its weakest since June 7 at 1.3393

* Canada sheds 6,400 jobs in July

* Canadian bond yields fall across the curve

TORONTO, Aug 4 (Reuters) – The Canadian dollar weakened
to a near two-month low against its U.S. counterpart on Friday,
as signs of cooling in the domestic jobs market led to reduced
bets for additional interest rate hikes by the Bank of Canada.

The loonie was trading 0.2% lower at 1.3372 to the
greenback, or 74.78 U.S. cents, after touching its weakest level
since June 7 at 1.3393.

For the week, the risk-sensitive currency was down 0.9%, its
third straight weekly decline, as a jump in long-term bond
yields rattled equity market investors.

“A lot of the risk-off this week was driven by the yield
curve resteepening after a deep inversion, which is a bit of a
bearish signal,” said Jay Zhao-Murray, market analyst at Monex
Canada Inc.

“Today, we got the jobs data that came in soft. I really
think that this is the first real signal that the labour market
is generally starting to cool.”

The Canadian economy shed 6,400 jobs in July, missing
estimates for a gain of 21,100, while the jobless rate ticked up
to 5.5%. Money markets see chances of another Bank of Canada
rate hike this year at about 50%, down from 80% before the jobs
report.

The U.S. dollar gave back some recent gains against a
basket of major currencies as U.S. employment data showed the
economy adding fewer jobs than expected in July.

The price of oil, one of Canada’s major exports, settled
1.6% higher at $82.82 a barrel, helped by this week’s pledge by
major producers to extend supply cuts through September.

Canadian government bond yields fell across the curve. The
10-year was down 16 basis points at 3.553%, after
touching on Thursday its highest intraday level since October at
3.734%.
(Reporting by Fergal Smith; editing by Grant McCool)