* C$ stages rally after dipping below 80 U.S. cents
* Rally snaps three-session losing streak
* Bond prices end slightly lower across the curve
By Frank Pingue
TORONTO, Feb 3 (Reuters) - The Canadian dollar rallied 1 percent versus the greenback on Tuesday as higher equities and unexpectedly strong U.S. data allowed the domestic currency to move comfortably off a one-week low seen overnight.
The combination of higher U.S. equity markets, a rally in prices for commodities that Canada exports and a rise in U.S. pending home sales left traders more willing to take on risk and unload the greenback, which is considered a safe-haven play.
"I think today is a one-off ... we were due for a bit of a relief rally, now the question is are we going to hold it for the next couple of days? But it's kind of hard to see," said Steve Butler, director of foreign exchange at Scotia Capital.
"Stocks looked okay, commodities looked okay and it just looked like a day of risk where people were willing to put risk back on the table."
The Canadian dollar closed at C$1.2301 to the U.S. dollar, or 81.29 U.S. cents, up from Monday's close of C$1.2436 to the U.S. dollar, or 80.41 U.S. cents.
Just before the session ended, it rose to C$1.2293 to the U.S. dollar, or 81.35 U.S. cents. That was 1.86 percent above an overnight low of C$1.2522 to the U.S. dollar, or 79.86 U.S. cents, which marked the Canadian dollar's lowest level since Jan. 23.
Another support for the Canadian dollar was higher prices for oil, a key Canadian export, which moved back above $41 a barrel as investors felt supply cuts by OPEC may finally be building a floor under crude prices.
But the domestic currency's rally followed three losing sessions versus the greenback and did not garner much excitement as experts felt it could just as easily relinquish the gains ahead of Friday's key domestic jobs data.
The report is expected to show the economy shed 40,000 jobs in January after losing 34,400 in December. Such a report would provide further evidence that Canada's economy is indeed in a recession and possibly trigger a selloff in the currency.
The Canadian dollar's drop below 80 U.S. cents during the overnight session was blamed partly on investors who opted to avoid on risk until catching a glimpse of the jobs data. U.S. jobs figures are also due on Friday and are expected to show the economy shed 525,000 jobs in January.
BOND PRICES DROP
Canadian bond prices resumed a recent decline to end down across the curve given the looming jobs reports and renewed focus on supply in Canada and the United States.
The domestic jobs report is expected to support calls for the Bank of Canada to cut rates below the current 50-year low, and until then the domestic bond market will likely be dictated by moves in the bigger U.S. Treasury market, analysts said.
"All the (data) highlights are at the end of the week with employment releases in both countries," said Sal Guatieri, senior economist at BMO Capital Markets.
Other Canadian data due this week includes building permits for December and January's Ivey Purchasing Managers Index, both due on Thursday.
The two-year bond fell 3 Canadian cents to C$102.52 to yield 1.343 percent, while the 10-year bond dropped 73 Canadian cents to C$109.45 to yield 3.075 percent.
The 30-year bond dropped C$1.25 to C$121.65 to yield 3.752 percent. In the United States, the 30-year treasury yielded 3.655 percent. (Editing by Jeffrey Hodgson)