CANADA FX DEBT-Canadian dollar retreats from 3-year high as U.S. bond yields soar

    (Adds analyst quotes and details throughout; updates prices)
    * Canadian dollar weakens 0.7% against the greenback
    * Loonie touches its strongest since February 2018 at 1.2468
    * Price of U.S. oil settles 0.5% higher
    * Canada's 10-year yield touches a 13-month high at 1.481%

    By Fergal Smith
    TORONTO, Feb 25 (Reuters) - The Canadian dollar weakened on
Thursday by the most in four weeks against the greenback, as
surging U.S. bond yields pressured global equity markets, with
the loonie pulling back from a three-year high.
    The loonie        was trading 0.7% lower at 1.2596 to the
greenback, or 79.39 U.S. cents, its biggest decline since Jan.
27. During the session, the loonie touched its strongest
intraday level since February 2018 at 1.2468.
    "The U.S. 10-year (yield) has just run away with it this
afternoon and is placing substantial pressure on high-beta
currencies," such as the Canadian dollar, said Simon Harvey,
senior FX market analyst for Monex Europe and Monex Canada.
    High-beta currencies tend to be more sensitive to risk
sentiment than the broader market. Canada runs a current account
deficit and is a major exporter of commodities, including oil.
    A jump in benchmark U.S. Treasury yields led a gauge of
global equity markets to retreat as investors sold the
high-flying tech stocks that fueled Wall Street's rally to
record highs and took precautions against the threat of
inflation.
    The price of oil, one of Canada's major exports, edged up to
its highest close since 2019 as Texas refineries restarted
production after last week's freeze. U.S. crude oil futures
       settled 0.5% higher at $63.53 a barrel.
    Canadian payroll employment rose by 44,200 in December after
decreasing by 64,500 in November, Statistics Canada said.
    Canadian government bond yields were higher across a steeper
curve in sympathy with U.S. Treasuries. The 10-year
touched its highest level since January last year at 1.486%
before dipping to 1.457%, up 14.2 basis points on the day.

 (Reporting by Fergal Smith; Editing by Kirsten Donovan)

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