(New throughout, updates prices and market activity, adds analyst comment and details of Dudley's comments) * Canadian dollar ends at C$1.3410, or 74.57 U.S. cents * Loonie touches its strongest since Monday at C$1.3343 * Canadian dollar ends week 0.8 percent lower * Bond prices end lower across the yield curve * 10-year yield hits four-month low intraday at 1.505 percent By Fergal Smith TORONTO, April 7 (Reuters) - The Canadian dollar strengthened on Friday against its U.S. counterpart, boosted by stronger-than-expected domestic jobs data, but gains for the loonie were pared as the greenback climbed against a basket of major currencies.
Canada added 19,400 jobs in March, much more than the 5,000 new positions that economists had expected. It marked the fourth month in a row that Canada has added jobs, the latest sign the economy is improving.
Still, economists doubt that the Bank of Canada will drop its cautious tone next week when it releases its interest rate announcement and Monetary Policy Report.
"Policy is likely to remain unchanged, probably supported by ongoing concern about those external risks," said Paul Ferley, assistant chief economist at Royal Bank of Canada.
Canada sends 75 percent of its exports to the United States and could suffer badly if the North American Free Trade Agreement is renegotiated or a proposed border adjustment tax is implemented.
The U.S. dollar rallied after New York Federal Reserve President William Dudley reduced expectations for a protracted pause in Fed interest rate hikes should the central bank begin shrinking its $4.5 trillion bond portfolio.
"The U.S. dollar has come back, pretty well supported generally on these comments from Dudley ... also I think, on closer examination, the U.S. jobs report was quite solid," said Daniel Katzive, head of FX strategy North America at BNP Paribas.
U.S. job growth slowed sharply in March. But a drop in the unemployment rate to a near 10-year low of 4.5 percent suggested the labor market was still tightening.
The Canadian dollar ended at C$1.3410 to the greenback, or 74.57 U.S. cents, slightly stronger than Thursday's close of C$1.3418, or 74.53 U.S. cents.
The currency's weakest level of the session was C$1.3431, while it touched its strongest since Monday at C$1.3343.
Gains for the loonie came as prices of oil, one of Canada's major exports, rose after the United States fired missiles at a Syrian government air base.
U.S. crude prices settled up 54 cents at $52.24 a barrel.
Still, the loonie lost 0.8 percent for the week, pressured by domestic data showing an unexpected trade deficit.
Canadian government bond prices were lower across the yield curve after Dudley's remarks offset safe-haven demand for government bonds.
The 10-year declined 39 Canadian cents to yield 1.596 percent. Earlier in the session, it touched its lowest since Nov. 17 at 1.505 percent.
(Editing by Bernadette Baum and David Gregorio)