* Canadian dollar at C$1.3170, or 75.93 U.S. cents
* Loonie on track to fall 0.9 percent for the week
* Canada loses 51,600 jobs in August
* Bond prices lower across the yield curve
By Fergal Smith
TORONTO, Sept 7 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday and was on track to fall nearly 1 percent for the week after data showed the economy unexpectedly shed jobs in August.
Canada's economy lost 51,600 jobs in August, the biggest decline since January, as losses in part-time work overtook gains in full-time employment, data from Statistics Canada showed. Analysts surveyed by Reuters had expected the economy to add 5,000 jobs. think there was some disappointment on the headline release," said Karl Schamotta, director of global markets strategy at Cambridge Global Payments. "The replacement of part-time positions with full-time to some extent helped to nullify the overall impact."
Perceived chances of a Bank of Canada interest rate hike in October dipped to 57 percent from 60 percent before the data, the overnight index swaps market indicated. BOCWATCH
On Thursday, Bank of Canada Senior Deputy Governor Carolyn Wilkins boosted rate hike expectations when she said in a speech that the central bank had discussed dropping its gradual approach to hiking rates. separate data, the Ivey Purchasing Managers Index (PMI) edged up to 61.9 from 61.8 in July, indicating an acceleration in economic activity. 3:02 p.m. (1902 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at C$1.3170 to the greenback, or 75.93 U.S. cents.
The currency traded in a range of C$1.3111 to C$1.3190. For the week, the loonie was on track to decline 0.9 percent.
Losses for the Canadian dollar on Friday came as stocks fell after U.S. President Donald Trump said fresh tariffs are ready to go on $267 billion worth of Chinese imports. runs a current account deficit and exports many commodities, so its economy could be hurt if an escalation in the trade dispute between the United States and China reduced the global flow of trade or capital.
The price of oil CLc1 , one of Canada's major exports, settled nearly unchanged. U.S. dollar .DXY rose against a basket of currencies after strong U.S. jobs data cemented expectations for the Federal Reserve to increase interest rates further. government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR fell 47 Canadian cents to yield 2.287 percent. deal to revamp the North American Free Trade Agreement remained elusive but differences between Canada and the United States appeared to have narrowed.