CANADA FX DEBT-C$ steadies after recent losses as oil rises
* Canadian dollar at C$1.2916, or 77.42 U.S. cents * Bond prices higher across the maturity curve (Adds details, quotes, updates prices) TORONTO/OTTAWA, May 10 (Reuters) - The Canadian dollar strengthened against the greenback on Tuesday after two days of losses as oil prices rose, while attention turned to when production will be brought back on line in the country's oil sands region. Oil sands companies are expected to work as quickly as possible to resume wildfire-disrupted production, but face the challenge of staff and suppliers being displaced. About half of the region's crude output, or 1 million barrels per day, was taken offline due to the fire, according to a Reuters estimate. Supply disruptions in Canada and elsewhere supported oil prices, offsetting concerns about growing U.S. stockpiles. U.S. crude ended up $1.22 at $44.66 a barrel. The loonie touched a one-month low on Monday and has lost nearly 3 percent since the start of the month, giving back just a small part of the about 14 percent gain it racked up between late January and the end of April. Tuesday's session was likely a bit of exhaustion after the recent snap-back, said Amo Sahota, director at Klarity FX in San Francisco. "I think the market has done a lot of work and is now going to go into a little period of consolidation," said Sahota. "For U.S. dollar-Canadian dollar, the sentiment there is that not looking for a big directional move here is probably about right and it's just trying to find some equilibrium." The Canadian dollar ended the North American session at C$1.2916 to the greenback, or 77.42 U.S. cents, stronger than Monday's close of C$1.2963, or 77.14 U.S. cents. Economists say Canadian second-quarter growth may slow to a standstill due to the Alberta wildfires, leaving the central bank on hold. The Bank of Canada said this weak it is too early to assess the economic impact. Overnight index swaps imply a 40 percent chance of an interest rate cut this year, a swing from a 20 percent chance of a hike at the beginning of the month. Canadian government bond prices were higher across the maturity curve, with the two-year price up half a Canadian cent to yield 0.526 percent and the benchmark 10-year rising 7 Canadian cents to yield 1.311 percent. (Reporting by Fergal Smith in Toronto and Leah Schnurr in Ottawa; Editing by James Dalgleish)
© Thomson Reuters 2016 All rights reserved.