TORONTO, Nov 20 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from an earlier one-week high, as the greenback notched broad-based gains and escalating Russia-Ukraine tensions led to investors turning more risk averse.
The loonie was trading 0.3% lower at 1.3990 to the U.S. dollar, or 71.48 U.S. cents, after two consecutive days of gains. The currency touched its strongest intraday level since Nov. 13 at 1.3948.
"USD-CAD resumed its uptrend after a 2-day pause," said Michael Goshko, senior market analyst at Convera Canada ULC. "The news Ukraine fired Storm Shadow missiles into Russia saw the market switch from risk-on to risk-off."
Wall Street stocks fell after a report Ukraine fired long-range British Storm Shadow missiles into Russian territory and the safe-haven U.S. dollar (.DXY), climbed against a basket of major currencies, restarting its post-election rally.
The price of oil , one of Canada's major exports, gave back its earlier gains to trade 0.5% lower at $69.06 a barrel.
Investors have reduced bets on another outsized interest rate cut by the Bank of Canada after domestic data on Tuesday showed inflation climbing more than expected to 2%.
Canadian retail sales data for September, due on Friday, could offer additional clues on the BoC policy outlook. Economists expect an increase of 0.4% from August.
Canadian bond yields rose across the curve, tracking moves in U.S. Treasuries. The 10-year was up 1.5 basis points at 3.350%, after earlier touching its highest level since July 24 at 3.390%.
C$5 billion of the 3.25% December 2034 bond was sold at auction at an average yield of 3.368%.
Reporting by Fergal Smith; Editing by Alistair Bell
