* Canadian dollar gains 0.3% against the greenback
* Price of U.S. oil settles 0.3% higher
* 10-year yield eases about half a basis point
TORONTO, May 9 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday as the greenback posted broad-based declines and ahead of domestic jobs data that could offer clues on the timing of Bank of Canada interest rate cuts.
The loonie was trading 0.3% higher at 1.3677 per U.S. dollar, or 73.12 U.S. cents.
"A big part of that (move) has been because of the broad U.S. dollar selling we saw after the worse-than-expected initial claims report," said Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull.
"Bad news is a good thing for the markets broadly speaking."
Wall Street rose and the U.S. dollar lost ground against a basket of major currencies after economic data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week.
Ebbing labor market momentum has put two interest rate cuts from the Federal Reserve this year back on the table.
Canada's employment report for April, due on Friday, is expected to show the economy adding 18,000 jobs and the unemployment rate increasing to 6.2%.
Disappointing data would solidify the chance of a Bank of Canada interest rate cut, Bregar said.
Money markets see a roughly 60% chance the Canadian central bank would begin a rate cutting campaign next month.
The Canadian financial system remains resilient, but the continuing adjustment to higher rates and possible shocks present key risks to stability, BoC Governor Tiff Macklem said.
The price of oil, one of Canada's major exports, settled 0.3% higher at $79.26 a barrel as data from China and the U.S. signaled that demand in the world's two biggest crude-consuming nations could climb.
The Canadian 10-year yield was down about half a basis point at 3.625%, as U.S. Treasury yields declined. (Reporting by Fergal Smith; editing by Jonathan Oatis)
