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Canadian dollar weakens 0.3% against the greenback
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Touches a 12-day high intraday at 1.3275
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Price of U.S. oil falls 2.7%
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Canadian bond yields rise across curve
TORONTO, Feb 14 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday, pulling back from its highest level in nearly two weeks, as oil prices fell and investors weighed mixed U.S. inflation data. The loonie was trading 0.3% lower at 1.3365 to the greenback, or 74.82 U.S. cents, after earlier touching its strongest since Feb. 2 at 1.3275. U.S. stock indexes opened lower before paring declines after data showed U.S. consumer prices accelerated in January but the pace of annual increase slowed, likely keeping the Federal Reserve on a path of moderate interest rate hikes. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to swings in investor sentiment. U.S. crude oil futures prices fell 2.7% to $77.97 a barrel after the U.S. government said it would release more crude from its Strategic Petroleum Reserve. The Bank of Canada has also been raising interest rates to fight inflation. Money markets see a roughly 80% chance that the BoC will tighten further by July after having expected the central bank's next move to be a cut before the release employment data on Friday that was much stronger than expected. Canadian government bond yields rose across the curve, tracking the move in U.S. Treasuries. The 10-year was up 3.8 basis points at 3.145% but stopping short of the five-week high it touched during Monday's session at 3.177%. (Reporting by Fergal Smith; Editing by Alison Williams)
