CANADA FX DEBT-C$ weakens for first time in nearly 2 weeks as oil falls

* Canadian dollar at C$1.2894 or 77.56 cents
    * Bond prices dip slightly across the maturity curve

    TORONTO, Aug 17 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday for the first time in
nearly two weeks as revived bets on U.S. interest rate rises
this year supported the greenback and oil dipped.
    The U.S. dollar firmed after one Fed official said
two rate hikes were possible by year-end and another said an
increase could come as soon as next month. 
    Oil prices fell, snapping a week-long rally, as investors
weighed the prospect of potential talks among producers reining
in ballooning oversupply. U.S. crude futures prices were
down 0.52 percent to $46.34 a barrel. 
    At 9:53 a.m. EDT (1353 GMT), the Canadian dollar 
was trading at C$1.2894 to the greenback, or 77.56 U.S. cents,
weaker than Tuesday's close of C$1.2853, or 77.80 U.S. cents.
    The currency's strongest level of the session was C$1.2850,
while its weakest was C$1.2919.  
    On Tuesday, the loonie touched its strongest since June 24
at C$1.2798 as domestic data showed a rebound in factory sales.
. The currency last fell on Aug. 5.
    Still, weak U.S. business investment has hampered a
long-awaited pick-up in growth of Canada's non-energy exports,
economists say, while a weaker Canadian dollar has not helped
exports as much as expected. 
    Canadian government bond prices were slightly lower across
the maturity curve, with the two-year price down 1.5
Canadian cents to yield 0.575 percent and the benchmark 10-year
 falling 3 Canadian cents to yield 1.068 percent.
    The 2-year yield touched its highest since July 29 at 0.603
    Canadian retail sales for June and inflation data for July
are due on Friday. 

 (Reporting by Fergal Smith Editing by W Simon)