* Canadian dollar at C$1.2983, or 77.02 U.S. cents
* Canadian jobs fall 7,500 jobs in May
* Price of U.S. oil falls 0.1 percent
* Bond prices lower across steeper yield curve
By Fergal Smith
TORONTO, June 8 (Reuters) - The Canadian dollar dipped against its broadly stronger U.S. counterpart on Friday after weaker-than-expected domestic jobs data, as investors braced for a likely acrimonious G7 meeting and weighed a shift to the right by voters in Ontario.
The Canadian economy unexpectedly shed 7,500 jobs in May as hiring declined in the manufacturing and construction sectors, data from Statistics Canada showed. Economists had forecast a gain of 17,500 jobs.
But wages rose at their strongest annual pace in nearly six years, which could give the Bank of Canada room to raise interest rates as soon as July. a policy perspective, I think it ends up being a wash, said Robert Kavcic, senior economist at BMO Capital Markets. "It was a very soft headline but wage growth is obviously something the Bank of Canada is looking at."
Expectations for an interest rate hike in July were little changed at about 70 percent after the data. BOCWATCH
The Group of Seven meeting of rich nations is almost certain to be marked by the clash of a combative U.S. President Donald Trump and other leaders when they pressure him to lift sanctions on steel and aluminum they fear could lead to a trade war. U.S. dollar .DXY climbed against a basket of major currencies, while stocks and other risk-sensitive assets lost ground ahead of the meeting. 9:26 a.m. EDT (1326 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent lower at C$1.2983 to the greenback, or 77.02 U.S. cents. The currency traded in a range of C$1.2970 to C$1.3040.
The price of oil, one of Canada's major exports, fell as weakening demand in China and surging U.S. output weighed on markets. U.S. crude CLc1 prices were down 0.1 percent at $65.91 a barrel. Conservatives, led by populist Doug Ford running for premier, claimed a sweeping victory in Canada's most populous province, Canadian networks reported. Investors are searching for an economic blueprint for the right-leaning party. gap between Ontario's 10-year yield and the equivalent maturity Quebec bond was 0.5 of a basis point narrower at a spread of 5 basis points.
"Nothing that really signals a major reaction to the election," said Maria Berlettano, head of Canadian government credit strategy at CIBC Capital Markets.
Canadian government bond prices were lower across a steeper yield curve, with the 10-year CA10YT=RR falling 28 Canadian cents to yield 2.316 percent.