* Canadian dollar trades near flat against the greenback
* Loonie touches a 2-1/2-year high intraday at 1.2767
* Price of U.S. oil declines 0.2%
* Canada's 10-year yield falls 1.8 basis points to 0.749%
TORONTO, Dec 8 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Tuesday, with the currency pulling back from an earlier two-and-a-half-year high as investors worried about the impact of rising global coronavirus cases on economic recovery.
Global shares .WORLD and the price of oil, one of Canada's major exports, fell after California tightened its pandemic lockdown through Christmas and coronavirus infections surged in the United States and Europe. U.S. crude CLc1 prices were down 0.2% at $45.65 a barrel. is also seeing a resurgence in the virus. The latest spread opens a new front for the world's second-largest country by area as it prepares for a logistically difficult vaccination program with COVID-19 infections now threatening to overwhelm hospitals. Canadian dollar CAD= was trading nearly unchanged at 1.2798 to the greenback, or 78.14 U.S. cents.
Earlier in the day, the currency touched its strongest intraday level since May 2018 at 1.2767. It has been supported by optimism that the roll out of vaccines will lift global economic growth in 2021.
The Bank of Canada is due to make an interest rate decision on Wednesday. In October, the central bank said it expected interest rates to remain at current record lows until 2023 and reduced its bond-buying program to C$4 billion per week from C$5 billion, while tweaking purchases toward longer-term bonds.
A Reuters poll showed that the central bank would not increase its asset-purchase program anytime soon. government bond yields were lower across the curve, with the 10-year CA10YT=RR down 1.8 basis points at 0.749%. On Monday, it touched a three-week high intraday at 0.810%.