* Canadian dollar falls 0.6% against the greenback
* U.S. oil prices decrease by 3.6%
* Bond prices move higher across a flatter yield curve
* Canada's curve inverts by the most in nearly two decades
TORONTO, Aug 14 (Reuters) - The Canadian dollar weakened to a one-week low against its U.S. counterpart on Wednesday as oil prices dropped and investors worried about the global growth outlook.
At 9:51 a.m. (1351 GMT), the Canadian dollar CAD=D4 was trading 0.6% lower at 1.3304 to the greenback, or 75.17 U.S. cents. The currency touched its weakest intraday level since last Wednesday at 1.3316.
U.S. stocks fell as a closely watched bond market indicator pointed to a renewed risk of recession, undoing gains from the previous session due to a retreat by Washington on its latest tariffs on Chinese goods. exports many commodities, including oil, so its economy could be hurt by a slowdown in the global economy.
Oil prices fell on weak economic data from China and Europe and a rise in U.S. crude inventories. U.S. crude CLc1 prices were down 3.56% at $55.03 a barrel. reported weaker-than-expected economic data for July, including a surprise drop in industrial output growth to a more than 17-year low, while a slump in exports sent Germany's economy into reverse in the second quarter. government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 9.5 Canadian cents to yield 1.334% and the 10-year CA10YT=RR climbed 84 Canadian cents to yield 1.156%.
The 10-year yield fell 3.8 basis points further below the 2-year yield to a spread of -17.8 basis points, the curve's largest inversion since June 2000. An inverted curve is seen by some investors as a harbinger of recession.