* Canadian dollar settles at C$1.3328, or 75.05 U.S. cents
* Loonie reverses after touching strongest since Feb. 28
* Bond prices mixed across flatter yield curve
* 10-year, 20-year yields hit nearly 5-month low
By Alastair Sharp
TORONTO, April 13 (Reuters) - The Canadian dollar turned weaker on Thursday after hitting a 6-week high, with investors selling the loonie as geopolitical tensions took on more significance after news that the United States had dropped a massive bomb in Afghanistan.
The currency had earlier been boosted by higher oil prices and domestic manufacturing sales that fell less than expected.
"Today we're being whipsawed by geopolitical risk, specifically the news about the bomb in Afghanistan," said Mazen Issa, a senior currency strategist at TD Securities.
The U.S. military said it dropped "the Mother of All Bombs," the largest non-nuclear device it has ever unleashed in combat, on a network of caves and tunnels used by Islamic State in eastern Afghanistan on Thursday. fall for the Canadian currency also came as the U.S. dollar rebounded from a heavy hit after U.S. President Donald Trump said the greenback was getting too strong and that he would prefer the Federal Reserve to keep interest rates low.
The Canadian dollar CAD=D4 settled at C$1.3328 to the greenback, or 75.05 U.S. cents, weaker than the Bank of Canada's official close on Wednesday of C$1.3273, or 75.34 U.S. cents.
It gained 0.6 percent over the week, helped by a less dovish tone out of the Bank of Canada on Wednesday. markets will be closed on Friday for the Good Friday holiday.
Prices of oil, one of Canada's major exports, were little changed after a strong week of gains in which crude benchmarks recouped most of March's losses. O/R
Canadian manufacturing sales fell 0.2 percent in February after three consecutive months of increases, weighed down by declines in the vehicle assembly sector, data from Statistics Canada showed.
The decrease was not as steep as the 0.7 percent decline economists had expected, while sales volumes rose 0.1 percent. manufacturing is still on an upward trajectory, and will contribute solidly to GDP growth" said Bill Adams, senior international economist at The PNC Financial Services Group (NYSE:PNC) in a research note.
Canadian government bond prices were mixed across a flatter yield curve, with the two-year CA2YT=RR down half a cent to yield 0.728 percent and the 10-year CA10YT=RR price up 10 Canadian cents to yield 1.494 percent, its lowest since November.
The 20-year issue and U.S. benchmark yields also hovered near a five-month trough.