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
    "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)