* Canadian dollar rises 0.1 percent against the greenback
* Loonie touches its weakest since Sept. 28 at 1.2955
* Canada adds 63,300 jobs in September
* Canada's 10-year yield nears a 5-year high at 2.595 percent
TORONTO, Oct 5 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Friday, recovering from an earlier one-week low, as data showing a jump in domestic jobs supported expectations of another interest rate hike this month from the Bank of Canada.
The Canadian economy added 63,300 jobs in September, Statistics Canada data indicated. That was more than twice as many as analysts had forecast, although all the job gains were in part-time positions. Bank of Canada has raised interest rates four times since July 2017. Chances of a further hike at the Oct. 24 policy announcement were little changed at about 85 percent after the data, the overnight index swaps market indicated. BOCWATCH
In separate data, Canada recorded its first trade surplus for more than 18 months in August as unusually timed shutdowns at auto plants helped cut imports at a greater rate than exports. 9:22 a.m. (1322 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent higher at 1.2915 to the greenback, or 77.43 U.S. cents. The currency's strongest level of the session was 1.2887, while it touched its weakest since Sept. 28 at 1.2955.
The modest gain for the loonie came as data showing a smaller-than-expected U.S. jobs gain weighed on the greenback.
The U.S. dollar .DXY declined against a basket of major currencies, paring some recent gains. the week, the loonie was on track to decline 0.1 percent. On Monday, it touched its strongest in more than four months at 1.2783 after a last-minute deal to salvage the trilateral North American Free Trade Agreement reduced uncertainty for Canada's economy.
U.S. crude oil futures CLc1 were little changed at $74.32 a barrel. Oil is one of Canada's major exports. government bond prices were lower across a steeper yield curve, with the two-year CA2YT=RR down 1 Canadian cent to yield 2.317 percent and the 10-year CA10YT=RR falling 23 Canadian cents to yield 2.587 percent.
The 10-year yield touched its highest since January 2014 at 2.595 percent.
Canada's bond market is due to close early ahead of the Thanksgiving Day holiday on Monday.
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