CANADA FX DEBT-Canadian dollar recoups most of weekly decline as jobless rate falls

By Fergal Smith

TORONTO, Feb 6 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday as stock markets rebounded and investors weighed mixed domestic employment data.

The loonie CAD= was trading 0.5% higher at 1.3645 per U.S. dollar, or 73.29 U.S. cents, after touching a 10-day low at 1.3724. For the week, the currency was down 0.2%.

Canada unexpectedly lost 24,800 jobs in January, but the losses were all part-time, and the unemployment rate dipped to a 16-month low of 6.5% as fewer people looked for work.

An increase in full-time jobs was a positive sign for the economy, said Amo Sahota, director at Klarity FX in San Francisco, adding that the currency could also have benefited from a recovery in equities and the Bank of Canada's reluctance to cut interest rates further.

On Thursday, BoC Governor Tiff Macklem pushed back against prospects of additional rate cuts, saying that a move to lower rates when the economy is weak could stoke inflation if the weakness was due to lower productive capacity rather than a cyclical downturn in demand.

Wall Street bounced back following a tech rout earlier in the week, while the U.S. dollar .DXY gave back some of its recent safe-haven gains.

The price of oil, one of Canada's major exports, was up 1.6% at $64.32 a barrel amid fears of another supply-disrupting Middle East conflict.

Canadian bond yields edged higher across the curve, tracking moves in U.S. Treasuries. The 10-year yield CA10YT=RR was up 1 basis point at 3.414%, trading around the middle of its range since early December.