CANADA FX DEBT-C$ hits a 1-week low as bond market selloff rattles investors

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* Canadian dollar weakens 0.3% against the greenback * Loonie hits a one-week low at 1.2684 * Price of U.S. oil falls 1.7% * Canadian bond yields mixed across a flatter curve TORONTO, Feb 26 (Reuters) - The Canadian dollar fell against its broadly stronger U.S. counterpart on Friday as this week's spike in bond yields weighed on investor sentiment, with the loonie extending its pullback from a three-year high the day before. The safe-haven U.S. dollar rose against a basket of major currencies and global stocks fell as a recent rout in global bond markets spooked investors amid fears the heavy losses suffered could trigger distressed selling in other assets. Canada runs a current account deficit and is a major exporter of commodities, including oil, so the loonie tends to be sensitive to investor risk appetite. U.S. crude oil futures were down 1.7% at $62.47 a barrel, with crude supply expected to rise in response to prices climbing above pre-pandemic levels. Higher energy prices contributed to a rise in Canadian producer prices in January, data from Statistics Canada showed. Prices rose 2% from December. The Canadian dollar was trading 0.3% lower at 1.2631 to the greenback, or 79.17 U.S. cents, having touched its weakest since last Friday at 1.2684. For the week, it was down 0.2%. On Thursday, the loonie touched its strongest intraday level since February 2018 at 1.2464. Canada's drug regulator approved AstraZeneca's COVID-19 vaccine, the third inoculation to get a green light and paving the way for health authorities to accelerate Canada's lagging vaccination campaign. Canadian government bond yields were mixed across a flatter curve, with the 10-year down 1.5 basis points at 1.451%. On Thursday, it touched a 13-month high at 1.486%, while it is up about 24 basis points since the start of the week. (Reporting by Fergal Smith; Editing by Steve Orlofsky)