* Canadian dollar falls 0.4 percent against the greenback
* Loonie hits its weakest since June 2017 at 1.3497
* Price of U.S. oil falls 7.3 percent
* Canadian factory sales fall 0.1 percent in October
* Canada's 10-year yield hits a nearly one-year low
By Fergal Smith
TORONTO, Dec 18 (Reuters) - The Canadian dollar weakened to a 1-1/2-year low against its U.S. counterpart on Tuesday, underperforming most other G10 currencies as the price of oil, one of Canada's major exports, slumped.
At 4:48 p.m. (2148 GMT), the Canadian dollar CAD=D4 was trading 0.4 percent lower at 1.3459 to the greenback, or 74.30 U.S. cents. The currency touched its weakest level since June 2017 at 1.3497.
Among G10 currencies, the loonie was the second worst performer. The worst was another oil-linked currency, the Norwegian krone.
U.S. crude oil futures CLc1 settled 7.3 percent lower at $46.24 a barrel as the market grappled with reports that U.S. supply would continue to surge even if demand weakens as global growth deteriorates, which many expect. all oil," said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman in New York. "I think everyone is really freaking out about the global slowdown story."
The Bank of Canada has worried that lower oil prices and cutbacks in production will reduce activity in Canada's energy sector. Canadian government said on Tuesday that it would spend C$1.6 billion, mostly through loans, to assist the country's oil and gas industry, which has struggled to move energy to U.S. markets because of full pipelines. to headwinds for the loonie, Canadian factory sales edged down by 0.1 percent in October from September on lower wood product and primary metal manufacturing sales, Statistics Canada said. U.S. dollar .DXY fell to a one-week low as investors unwound long bets on the currency, anticipating that the Federal Reserve could slow the pace of U.S. interest rate hikes after this week's policy meeting. government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 6.5 Canadian cents to yield 1.925 percent and the 10-year CA10YT=RR climbed 23 Canadian cents to yield 2.015 percent.
The 10-year yield touched its lowest intraday since Dec. 28, 2017, at 2.007 percent.
Canada's inflation report for November is due on Wednesday.