(Adds details throughout, updates prices)
* Loonie touches its strongest since May 2015 at 1.2046
* Price of U.S. oil settles 1.2% higher
* Canadian 10-year yield touches its highest in nearly two weeks
By Fergal Smith
TORONTO, May 12 (Reuters) - The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Wednesday, holding near an earlier six-year high as investors bet that the Bank of Canada would be more sensitive to rising inflation than the Federal Reserve.
The U.S. dollar .DXY rallied against a basket of major currencies as data showed U.S. consumer prices increasing by the most in nearly 12 years in April. inflation in the U.S. will spill over into Canada's economy and place upwards pressure on Canadian CPI," said Simon Harvey, senior FX market analyst for Monex Europe and Monex Canada.
The Bank of Canada is likely to be "much more sensitive" to rising inflation than the Fed, Harvey said.
Last August, the Fed shifted to a new monetary policy strategy, putting new weight on bolstering the U.S. labor market and less on worries about too-high inflation. central bank signaled last month it could start raising its benchmark interest rate from a record low of 0.25% in late 2022 and cut the pace of its bond purchases. Governor Tiff Macklem is due to speak on Thursday on "the benefits of an inclusive economy."
The Canadian dollar CAD= was trading nearly unchanged at 1.2100 to the greenback, or 82.64 U.S. cents, having touched its strongest level since May 2015 at 1.2046. It gained ground against the other G10 currencies.
One major cause of inflation has been higher prices for some of the commodities that Canada produces, including oil.
U.S. crude oil futures CLc1 settled 1.2% higher at $66.08 a barrel on signs of a speedy economic recovery and upbeat forecasts for energy demand. government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year CA10YT=RR touched its highest since April 29, up as much as 6.6 basis points on the day.