CANADA FX DEBT-C$ pulls back from recent rally as oil prices fall

* Canadian dollar at C$1.2829 or 77.95 U.S. cents

* Bond prices higher across the maturity curve

March 12 (Reuters) - The Canadian dollar weakened modestly against the greenback on Monday, consolidating after last week's rally and as oil prices slipped on expectations that U.S. output will rise this year. At 9:01 a.m. EST (1301 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2829 to the greenback, or 77.95 U.S. cents. The loonie pulled back from a more than one-week high hit on Friday amid improved risk appetite and after U.S. President Donald Trump said Canada and Mexico would be exempt from tariffs on steel and aluminum as long as talks to update the North American Free Trade Agreement progressed (NAFTA). Still, investors were likely to remain wary over the risk of a global trade war after Trump's tariffs were met with criticism from Germany and China. Lower oil prices also helped pressure the Canadian dollar as

U.S. crude was down 0.97 percent at $61.44 a barrel.

Canadian markets were also looking ahead to Tuesday's speech on the labor market by Bank of Canada Governor Stephen Poloz, likely the main domestic economic event of the week. The central bank held interest rates steady last week as expected, while a speech from Deputy Governor Tim Lane on Thursday stuck to the bank's dovish message that it will be cautious in considering further increases. Finance Minister Bill Morneau said during a visit to London on Monday that there are parallels between the way companies in North America and Britain are holding back on investment as they respectively wait for clarity on the re-negotiation of NAFTA and the outcome of talks on a Brexit deal. Canadian government bond prices were higher across the

maturity curve, with the two-year up 0.5 Canadian

cent to yield 1.829 percent and the benchmark 10-year rising 5 Canadian cents to yield 2.265 percent.

(Reporting by Leah Schnurr in Ottawa; Editing by Steve Orlofsky)