* Canadian dollar at C$1.3710, or 72.94 U.S. cents
* Bond prices higher across a flatter yield curve
TORONTO, May 12 (Reuters) - The Canadian dollar edged lower against its broadly weaker U.S. counterpart on Friday, but kept some distance from a recent 14-month low as prices of oil held on to this week's gains.
U.S. crude CLc1 prices, which had hit a five-month low one week ago, edged up 0.17 percent to $47.91 a barrel, helped by expectations of an extension of OPEC-led output cuts and buoyed by falling U.S. crude inventories. is one of Canada's major exports and the currency's historically close link to the commodity has become stronger in recent weeks.
The three-month rolling correlation between the Canadian dollar and oil reached 0.75, its highest since September, indicating the currency and commodity move mostly in the same direction.
The U.S. dollar .DXY fell against a basket of major currencies after data showed U.S. retail sales increased less-than-expected in April. 9:51 a.m. ET (1351 GMT), the Canadian dollar CAD=D4 was trading at C$1.3710 to the greenback, or 72.94 U.S. cents, down 0.1 percent, according to Reuters data.
The currency traded in a range of C$1.3665 to C$1.3742. One week ago, it had hit its weakest in 14 months at C$1.3793.
Shares of Canada's biggest non-bank lender Home Capital Group Inc HCG.TO fell after the company raised doubts about its ability to continue as a going concern.
Investors have been wary about how Home Capital's troubles could impact the country's red-hot housing market.
Canadian home prices rose in April, lifted once again by hefty price gains in the hot Toronto market which some fear is becoming overheated. government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 2.5 Canadian cents to yield 0.693 percent and the 10-year CA10YT=RR climbed 36 Canadian cents to yield 1.565 percent.
The gap between the 2-year yield and the 10-year yield narrowed 2.7 basis points to a spread of 87.2 basis points as longer-dated bonds outperformed.