CANADA FX DEBT-Canadian dollar hits 10-day low as jobs slide cools rate hike bets

* Canadian dollar falls 0.6% against the greenback

* Touches its weakest since March 3 at 1.3722

* Canada's economy sheds 83,900 jobs in February

* Bond yields fall across the curve

By Fergal Smith

TORONTO, March 13 (Reuters) - The Canadian dollar weakened to a 10-day low against its U.S. counterpart on Friday, as investors reduced bets on Bank of Canada interest rate hikes this year after domestic data that showed a surprise sharp decline in employment.

The loonie was trading 0.6% lower at 1.3722 per U.S. dollar, or 72.88 U.S. cents, marking its weakest intraday level since March 3. For the week, the currency was down 1.1%, putting it on track for its biggest weekly decline since early January.

"The CAD is sliding into the weekend, reflecting a combination of anxiety about the developments in the Middle East on the one hand and much weaker than expected Canadian employment data on the other," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note.

Canada's economy shed 83,900 jobs in February and the unemployment rate rose to 6.7%. Economists had forecast a jobs gain of 10,000. Investors expect the Bank of Canada to leave its benchmark interest rate unchanged at 2.25% next Wednesday. For 2025, the market has priced in 36 basis of rate hikes, which is down from 44 basis points before the data.

The Middle East war has supported bets for tighter monetary policy from central banks globally as a spike in oil prices raises the prospect of hotter inflation. Safe-haven demand helped put the U.S. dollar on course for a second consecutive weekly gain against a basket of major currencies, while the price of oil was little changed at $95.75 a barrel, holding on to its recent gains. Oil is one of Canada's major exports.

Canadian bond yields moved lower across the curve. The 2-year was down 6.1 basis points at 2.761%, while the 10-year declined 4.1 basis points to 3.495%, after earlier touching its highest level since July 25 at 3.566%. (Reporting by Fergal Smith; Editing by Alistair Bell)