CANADA FX DEBT-C$ recovers from 5-week low, boosted by jobs data

* Canadian dollar at C$1.2538, or 79.76 U.S. cents

* Loonie touches a 5-week low at C$1.2600 before recovering

* Canadian jobs rise by 10,000 in September

* Bond prices lower across the yield curve

TORONTO, Oct 6 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday, recovering from a five-week low, after domestic data showed a pickup in wages and reduced worries that the economy will slow in the second half of the year. The Canadian economy added 10,000 jobs in September, below forecasts for a 14,500 gain, data from Statistics Canada showed. But the pace of wage growth was the fastest in more than a year.

"The message we were getting from the Bank of Canada was to expect softening in the data but that number didn't show any signs of it," said Michael Goshko, corporate risk manager at Western Union Business Solutions. The central bank has hiked the benchmark interest rate twice since July after the economy expanded rapidly in the first half of the year. But chances of another hike this year have retreated to less than 20 percent from nearly 40 percent before a speech last week by Governor Stephen Poloz, which analysts viewed as dovish. Still, speculators have raised bullish bets on the loonie to the highest since November 2012, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Oct. 3, Canadian dollar net long positions had edged up to 75,128 contracts from 74,605 a week earlier. The pace of purchasing activity also picked up in September.

At 4:13 p.m. ET (2013 GMT), the Canadian dollar was

trading at C$1.2538 to the greenback, or 79.76 U.S. cents, up 0.2 percent. The currency's strongest level of the session was C$1.2526, while it touched its weakest since Aug. 31 at C$1.2600. For the week, the loonie lost 0.6 percent. The gain for the loonie on Friday came despite lower prices for oil, one of Canada's major exports. U.S. crude settled nearly 3 percent lower at $49.29 a barrel.

The U.S. dollar dipped against a basket of major

currencies after data showed a loss of jobs in the United States in September because of hurricanes. Canadian government bond prices were lower across the yield

curve, with the two-year down 4.5 Canadian cents to yield 1.55 percent and the 10-year falling 20

Canadian cents to yield 2.127 percent.

(Reporting by Fergal Smith; Editing by Lisa Von Ahn and Rosalba O'Brien)